antidilutive

Antidilution Clause

1. In common and preferred stock, the right of a shareholder to maintain the same percentage of ownership in a company, should the company issue more stock. This protects the investor from devaluation of his/her shares if the company decides to hold a round of financing. In preferred stock, the anti-dilution clause also indicates the right of a shareholder to purchase more shares in a new round of financing at the offering price up to his/her previous percentage of ownership. Most U.S. states only recognize the anti-dilution clause if it is made explicit in the corporation's charter.

2. In convertible securities, the right of a holder to maintain the same conversion ratio in the event of a stock split. For example, if a convertible bond may be exchanged for 100 shares of common stock and there is a 2-for-1 stock split, the same convertible bond can be exchanged for 200 shares. This protects the investor from devaluation of the conversion option.

antidilutive

Of or relating to the conversion of convertible securities into common stock when such conversion would result in an increase in diluted earnings per share or a decrease in diluted loss per share. For example, it is an antidilutive conversion if outstanding warrants are assumed to be exercised in order to acquire shares of common stock at a higher price than the market price of the stock. Such a conversion would result in an increase in diluted earnings per share. Conversions that would increase earnings per share or reduce loss per share are not generally used in calculating diluted earnings per share.
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Non-GAAP net income per diluted share for the first quarter of fiscal years 2019 and 2018 reflects the antidilutive impact of the company's convertible note hedges.
Antidilutive shares are excluded from the number of shares outstanding in calculations of dilutive EPS.
Additionally, the company's 2.0% convertible senior subordinated notes are convertible, at the option of the holder, at any time prior to the close of business on the business day immediately preceding 1 December 2043 into its common stock at a conversion rate of 26.6011 common stock per USD1,000 principal and include antidilutive protection that provides for an increase in common stock issuable upon conversion resulting from common stock dividends after a de minimis threshold.
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.
(183) The various national GI laws that comport with TRIPS are intended to "allow cultural diversity to thrive and artisans to remain in their villages, resisting the pull of city industry." (184) This trademark-like protection is neither consumer-oriented nor antidilutive in scope.
Diluted earnings per share shall be based on the actual number of options or shares granted and not yet forfeited, unless doing so would be antidilutive. If vesting in or the ability to exercise (or retain) an award is contingent on a performance or market condition, such as the level of future earnings, the shares or share options shall be treated as contingently issuable shares in accordance with paragraphs 30-35 of Statement 128.
(13) Managers with negative GAAP EPS numbers can manipulate the number of shares outstanding in the denominator of their pro forma EPS calculation to decrease a GAAP loss per share in two ways: (1) including antidilutive convertible securities and (2) including convertible securities issued during the year in the weighted number of shares outstanding as if they had been converted at the beginning of the year.
Specifically, there is no adjustment for options for firms with losses (because these options are considered by the FASB to be antidilutive).
Even though they have an antidilutive effect on income before extraordinary items, they have a dilutive effect on net income.
Subsequently throughout the first half of the year, it was difficult to attend a trade show without hearing someone say, "Loral has been in, taking a look around our company." Then, in August, Loral announed it was buying Ford Aerospace in tandem with Shearson Lehman Hutton in an antidilutive transaction.
In that situation, the potential shares are antidilutive and not included in the company's EPS calculation.
The incremental number of shares is always a positive number--that is, the exercise of the TSM cannot be antidilutive.