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


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 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.


  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 this method the PNT baseline was arbitrarily set at an absorbance by plotting the average of triplicate, corrected absorbance readings at serial dilutions of the observed titres for positive and negative sera.
5 dilutions of the actual semiquantitative titer when measured by serial dilution.
Because concentration is volume dependent, these three sources of error are directly connected to serial dilutions.
If you did not have a serial dilution but made each dilution step different, the equation would be, for example, 1/2 x 1/5 X 1/10 x 1/2 = 1/200, or 1:200, or 2 x [10.
Serial dilution quantitative intradermal testing, also referred to as skin endpoint titration (SET), is a modified intradermal test that uses specific antigen dilutions to establish the minimum amount of antigen required to produce a positive skin test, also referred to as the endpoint.
0625-4 mg/ml), together with a series of two-fold serial dilutions of Amp B and fluconazol in the 0.
A new serial dilution feature provides the ability to load a single row or column of tips onto a 96-or 384-channel dispense head and travel across a microplate in either direction to perform serial dilutions common in IC-50 curves and standard screening applications.
The MTT method which involves a serial dilution required a total amount of 1000 [micro]g (100 [micro]l of 10 mg/ml) for each plant for ease of dilution and the detection was at 40, 310 and above 5000 [micro]g for T.
Students repeat the serial dilution four to five more times.
Each MiniTrak features PerkinElmer's high capacity Stack Doubler(TM), 20-inch MultiPosition Dispense (MPD) modules and conveyor-based operation for simultaneous "parallel processing," as well as a new serial dilution feature.
Continue this serial dilution method (using a new pipet at each dilution) through Tube #5.