Dilutive effect

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 ?
Enhanced disclosures required in the bills include: 1) a discussion of the dilutive effect of stock option plans (written in accordance with something called the "Plain English Handbook"); 2) expanded disclosure of the dilutive effect of stock options on the company's earnings per share number; 3) prominent placement and increased comparability of all stock option-related information; and 4) a summary of stock options granted to the five most highly compensated executive officers, including their outstanding options.
The closing of the transaction is anticipated prior to June 2000, and would have some slight dilutive effect on BroadVision's earnings in the first half of the year 2000, according to a company spokesperson.
The method used to determine the dilutive effect of a convertible security.
By repurchasing the notes, ICG removed the future dilutive effect of the approximately 2.
Factors which could have a material adverse effect on the operations and future prospects of the Company include, but are not limited to, fluctuations in market rates of interest and loan and deposit pricing; a deterioration of general economic conditions or the demand for housing in the Company's market areas; legislative or regulatory changes; adverse developments in the Company's loan or investment portfolio; any inability to obtain funding on favorable terms; the loss of key personnel; significant increases in competition; and the possible dilutive effect of potential acquisitions or expansions.
In connection with the program, Life Time Fitness' board of directors has authorized purchases by the company of up to 500,000 shares of its common stock from time to time in the open market or otherwise for the primary purpose of offsetting the dilutive effect of shares issued pursuant to the ESPP.
The percentage increase in expected net income for the 2006 second quarter exceeds the percentage increase in expected diluted earnings per share due to the dilutive effect of the July 2005 follow-on equity offering.
Managements often defend their repurchase activity as countering the dilutive effect of option and stock grants; however, the number of shares repurchased by the companies identified in this research is often much greater than such dilution would warrant.
The intent of the repurchase program is to approximately offset the otherwise dilutive effect of stock option grants.
The normal course issuer bid is being established to mitigate the dilutive effect of stock options issued under the Corporation's stock option plan and for other capital management purposes.
04-8, the dilutive effect of this potential issuance has already been reflected in the Company's diluted earnings per share reported in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2005.
The Company intends to repurchase shares to mitigate the dilutive effect of stock options, and shares repurchased may be reserved for later reissue in connection with employee benefit plans and other general corporate purposes.