watered stock

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Watered stock

A stock representing ownership in a corporation that is worth less than the actual invested capital, resulting in problems of low liquidity, inadequate return on investment, and low market value.

Watered Stock

An overvalued stock. A stock may be overvalued for any number of reasons; speculation and over-issue are only two of the most common. Watered stocks are often subject to a price correction.

watered stock

Stock that is issued with a value considerably in excess of the value of the assets that support it. The term may be derived from the practice of feeding cattle salt to induce them to drink large amounts of water just before they are sold, thereby increasing their weight. Thus, the buyer—whether of stock or of livestock—pays for more than is actually received.