Antidilutive effect

Result of a transaction that increases earnings per common share (e.g., by decreasing the number of shares outstanding).

Antidilutive Effect

The result of the retirement of shares, usually through a buyback. That is, a company may buy back some of its own shares from shareholders, which reduces the number of shares outstanding. This increases the company's earnings per share, which in turn usually increases the stock price.

References in periodicals archive ?

Even though they have an antidilutive effect on income before extraordinary items, they have a dilutive effect on net income.

Calculating earnings per share: statements of accounting standard No. 128

The equation, which can be embedded within an Excel spreadsheet, runs different scenarios to determine the various antidilutive effects of share repurchases or reinvestment under different considerations.

Sometimes doing nothing really is better: a closer look at stock options, share repurchases, and earnings per share