Recent Examples of dilution from the Web
Critics also objected to the potential dilution for Tesla’s shareholders.
Red may be the color of all-out rebellion, but pastels, which by definition are a dilution of pigment, can provide a sneakier kind of insurrection.
Total eliminated the discount that encouraged shareholders to participate in the scrip and pledged to buy back additional shares under the program this year to prevent further dilution.
Because of the widespread dilution, Research Affiliates reckons that since 1871, EPS has risen around 1.5% a year in real terms, lagging total earnings by around 2 points.
The latest filing followed U.S. District Judge Josephine Staton’s decision earlier in December to dismiss Andersen Hotel’s claims of trademark infringement, false designation of origin and service mark dilution.
Relegation from the Premier League or dilution of shares are some of the examples where that could take place.
The court also held, by the same vote, that 11 of Texas’ state House districts were impermissibly tainted by the intentional dilution of minority votes.
The other is dilution; that special depth of camaraderie will be lost, not least because students will show off more.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'dilution.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
Financial Definition of DILUTION
What It Is
How It Works
Let's assume you own 100,000 shares of XYZ Company. The company has 1,000,000 shares outstanding, meaning that you own 10% of the company. Shares of XYZ Company are trading at $5, so the company's current market value is $5,000,000 and your investment is worth $500,000.
XYZ Company wants to build a new plant, so it issues 500,000 shares. Your 100,000 shares are now only 6.67% of the company (100,000/1,500,000 = 6.67%).
In the end, the dilution may be worth it if the plant makes XYZ Company more profitable. If however, the company issued those shares as part of an overly generous stock option program or to raise funds for projects that fail to contribute profit, the dilution may cause permanent damage to the value of your holding.
Why It Matters
Dilution is the act of dividing the proverbial pie into ever smaller pieces, and it is usually not well received by investors. Several events can cause dilution, particularly secondary offerings, the conversion of convertible securities, option exercises, and warrant exercises. On occasion, companies purchase their own shares on the open market to combat dilution. It is important to note stock splits do not usually create dilution, because in a stock split the investor receives additional shares to preserve his or her percentage ownership and investment value.
Although dilution most noticeably affects ownership percentages, earnings per share calculations also consider the effects of dilution. This is why most public companies report both basic and diluted earnings, whereby potentially dilutive securities are treated as if they were already converted to outstanding shares. This effectively increases the number of shares over which the company's earnings would be spread if all potentially dilutive securities were exercised.
In some companies, shareholders can protect themselves from dilution if they have the right to purchase shares in any of the company's future stock issuances. These anti-dilution provisions, also called subscription rights or preemptive rights, usually appear in a corporation's charter.
DILUTION Defined for Kids
Definition of dilution for Students
legal Definition of dilution
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