Dilution

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Updated: Aug 20, 2021

The reduction in value of individual shares, ownership percentages, voting strength, and earnings per share caused by the issue of additional common stock by a company. The additional stock can result from a rights issue, a secondary market offering, the exercise of stock options, or by turning convertible debentures, preference shares, or warrants into stock.

Reference: Oxford Press Dictonary of Economics, 5th edt.


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James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.