Dilutive effect

(redirected from Dilutive Effects)

Dilutive effect

Result of a transaction that decreases earnings per common share (EPS).

Dilutive Effect

The result of an increase in the number of shares, usually through a new issue. That is, a company may issue more shares to shareholders and other investors, which raises the number of shares outstanding. This decreases the company's earnings per share, which, in turn, can decrease the stock price. See also: Anti-dilution provision.

References in periodicals archive ?

The Netlist board of directors decided to avoid the potentially dilutive effects of a reverse stock split and move voluntarily to the OTCQX.

Netlist moving to OTCQX

Despite the dilutive effects, it may be attractive to improve liquidity at these higher share prices given the dim offshore rig utilization and day-rate prospects over the medium term.

Fitch: Offshore Driller Equity Rally May Prompt Liquidity Raises

Conventional wisdom says that companies should use share repurchases to offset the dilutive effects of exercised stock options on earnings per share (EPS).

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

This move is intended to help 'offset share dilution and help improve shareholder returns.' Ford will repurchase 103 million shares to offset any dilutive effects that Senior Convertible Notes, which are due in November, might have on the firm's stock price.

Ford to buy back 116 million shares of common stock

Such repurchased shares may become treasury shares and utilized for general corporate and other purposes, including the issuances of shares pursuant to the company's stock benefit plans in order to mitigate the potentially dilutive effects of such plans.

Teche Holding commences stock repurchase plan

The timing and actual number of shares repurchased will depend on a variety of factors, including price, Advent's cash balances, general business and market conditions, the dilutive effects of share-based incentive plans, alternative investment opportunities and working capital needs.

Advent Software authorises further stock repurchases

In addition to reducing this liability, the transaction also decreases the dilutive effects of the bonds by 5.2 million shares.

Taseko Mines Announces Debt Reduction

Clearly, any "off-the-shelf" option valuation model must be adjusted to incorporate the dilutive effects of ESOs.

Are your ESO values on target? Valuing employee stock options for closely held companies

Choosing among these different options generally comes down to cost constraints and the independent directors' tolerance for the dilutive effects of covering all independent directors by a single pool of insurance dollars.

Do independent directors need IDL coverage? A look at independent director liability insurance and the added protection it offers

In this paper, we focus on the proper measurement of the denominator in the EPS calculation and provide theoretical and empirical evidence that diluted EPS, when computed using the FASB treasury-stock method, underestimates the economic dilutive effects of outstanding options.

The economic dilution of employee stock options: diluted EPS for valuation and financial reporting

Analysts reckon the sell-off Wednesday was largely due to significant profit taking ahead of any impact the dilutive effects the offering may have on the share price going forward.

Juniper Files for $1bn Offering; Shares Slide

Such repurchased shares may become treasury shares and utilized for general corporate and other purposes, including the issuances of shares to the company's stock benefit plans to mitigate the potentially dilutive effects of such plans.