The Netlist board of directors decided to avoid the potentially dilutive effects
of a reverse stock split and move voluntarily to the 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.
Conventional wisdom says that companies should use share repurchases to offset the dilutive effects
of exercised stock options on earnings per share (EPS).
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.
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.
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.
In addition to reducing this liability, the transaction also decreases the dilutive effects
of the bonds by 5.2 million shares.
Clearly, any "off-the-shelf" option valuation model must be adjusted to incorporate the dilutive effects
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.
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.
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.
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.