dilution

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Dilution

Diminution in the proportion of income to which each share is entitled. Issing new shares often causes dillution.

dilution

A decrease in the equity position of a share of stock because of the issuance of additional shares. Dilution is usually detrimental to the position of existing shareholders because it weakens their proportional claim on earnings and assets. See also potential dilution.

Dilution.

Dilution occurs when a company issues additional shares of stock, and as a result the earnings per share and the book value per share decline.

This happens because earnings per share and book value per share are calculated by dividing the total earnings or book value by the number of existing shares.

The larger the number of shares, the lower the value of each share. Lower earnings per share may trigger a selloff in the stock, lowering its price. That's one reason a company may choose to issue bonds rather than new stock to raise additional capital.

Similarly, if companies merge or one buys another, earnings may be diluted if they don't increase proportionately with the combined number of shares in the newly created company.

Dilution can also occur if warrants and stock options on a stock are exercised, and if convertible bonds and preferred stock the company issued are converted to common stock.

Companies must report the worst-case potential for such dilution, or loss of value, to their shareholders as diluted earnings per share.

dilution

  1. the decrease in control and EARNINGS PER SHARE experienced by existing shareholders in a JOINT-STOCK COMPANY when SHARE ISSUES are made which attract new shareholders. Dilution is a particular problem in fast-growing, family-controlled companies where the need to raise new capital may dilute the founding family's shareholdings to below 50%, causing them to lose potential control of the company.

    In the past, companies have sought to avoid dilution whilst continuing to raise capital by issuing NON-VOTING SHARES; but these are nowadays disapproved of by most STOCK MARKETS.

  2. the weakening of the monopoly of skills of a particular occupational group by the recruitment of less-skilled workers to perform the same work. See SKILL.
References in periodicals archive ?
In addition, we demonstrated within this clinical cohort a novel method of CRAG titer quantification for an LFA by using laser thermal contrast measurement (19), enabling CRAG titer quantification without traditional serial dilutions.
One ml from each sample homogenate was added to 9 ml peptone water tube and the process was repeated to make serial dilutions (from [10.
Serial dilution titration skin tests in inhalant allergy: A clinical quantitative assessment of biologic skin reactivity to allergenic extracts.
Serial dilutions were performed to a concentration of 1.
The use of PCR assays for the detection of parasites in tissues involves the generation of standard curves, often accomplished by adding a serial dilution of known parasite numbers to uninfected tissue ("spiking").
I use my automated liquid handler to perform serial dilutions in microtiter plates and I want to understand where the biggest potential for errors would be.
Determination of ELISA antibody titres : ELISA antibody titres were determined by standard serial dilution, and end-points were calculated by a subtraction method (7) as described below.
Serial dilution is one of the most basic procedures in soil biology studies.
Pre-programmed application temp lates for Plate Replication, Serial Dilution, Assay Set-up, Hit Picking and DNA/RNA/Protein Purification allow researchers and scientists to begin working with the Sciclone ALH 4000 immediately, and provide the flexibility to easily switch between applications without the hassle and complexity of programming.
Potentization invites serial dilution with succussion (violent strokes) or trituration at each stage.
The groups were not found, however, to have significantly altered their ancestral niche (defined as the range of temperatures over which they could maintain their populations during daily serial dilution culture).
After the protein extraction, prepare a serial dilution with the extracted protein by diluting the protein extract two fold with each successive dilution into a series of additional five tubes.