dilution


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Related to dilution: Dilution Factor, serial dilution

Dilution

Diminution in the proportion of income to which each share is entitled. Issing new shares often causes dillution.

dilution

A decrease in the equity position of a share of stock because of the issuance of additional shares. Dilution is usually detrimental to the position of existing shareholders because it weakens their proportional claim on earnings and assets. See also potential dilution.

Dilution.

Dilution occurs when a company issues additional shares of stock, and as a result the earnings per share and the book value per share decline.

This happens because earnings per share and book value per share are calculated by dividing the total earnings or book value by the number of existing shares.

The larger the number of shares, the lower the value of each share. Lower earnings per share may trigger a selloff in the stock, lowering its price. That's one reason a company may choose to issue bonds rather than new stock to raise additional capital.

Similarly, if companies merge or one buys another, earnings may be diluted if they don't increase proportionately with the combined number of shares in the newly created company.

Dilution can also occur if warrants and stock options on a stock are exercised, and if convertible bonds and preferred stock the company issued are converted to common stock.

Companies must report the worst-case potential for such dilution, or loss of value, to their shareholders as diluted earnings per share.

dilution

  1. the decrease in control and EARNINGS PER SHARE experienced by existing shareholders in a JOINT-STOCK COMPANY when SHARE ISSUES are made which attract new shareholders. Dilution is a particular problem in fast-growing, family-controlled companies where the need to raise new capital may dilute the founding family's shareholdings to below 50%, causing them to lose potential control of the company.

    In the past, companies have sought to avoid dilution whilst continuing to raise capital by issuing NON-VOTING SHARES; but these are nowadays disapproved of by most STOCK MARKETS.

  2. the weakening of the monopoly of skills of a particular occupational group by the recruitment of less-skilled workers to perform the same work. See SKILL.
References in periodicals archive ?
In determining whether a mark or trade name is likely to cause dilution by blurring, the court may consider all relevant factors, including the following: (i) The degree of similarity between the mark or trade name and the famous mark.
The first court to adjudicate a dilution by blurring claim post-TDRA was the Fourth Circuit in a case involving the famous brand Louis Vuitton.
In conclusion, rLipL32 single serum dilution ELISA with its excellent diagnostic specificity and sensitivity, convenient technical features, its potential for automation, may be efficiently utilized as a screening test for a large number of serum samples for the detection of leptospiral antibodies.
33) To prevent dilution relief from supplanting infringement relief and overprotecting trademarks, the FTDA dilution remedy is restricted to only the most famous trademarks which suffer actual trademark dilution.
In this study, we compared the recommended dilution protocol against two dilution protocols in which the diluent is composed of the assay solubilization and precipitation reagents.
Under our senior dilution mechanism, a court would issue 100 shares in the reorganized firm to senior claimants but would potentially dilute the value of the seniors' claims by issuing dilution shares to juniors until there was greater supply of seniors' stock than demand at a fixed price of $1 per share.
against both trademark infringement and dilution in the United States.
Revised and new state dilution law chapters are devoted to defenses and remedies, as well as updated coverage of newly adopted state laws--particularly those influenced by the most recent Model State Trademark Bill.
Cooperating with highly specialized equipment manufacturers, Henkel has developed an automatic dilution station that controls and monitors the dilution process of the Adhesin concentrate.
Dilution protocol of bile acids in Lowenstein-Jensen medium Lowenstein-Jensen medium with bile acid additives Lithocolic acid Cholic acid (mg/ml) (mg/ml) Dilution 1 2 32 Dilution 2 1 16 Dilution 3 0.
In this lab, we will start with an unknown amount of beads and simulate a serial dilution so that you will be able to visualize what is happening and be able to calculate the number of beads in your original sample.
Each dilution was analyzed using the avian-reptile rotor and the results multiplied by the appropriate dilution factor to obtain the final result.