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I can see your point SH, but if they sell the shares they have cash to use, if they raise the cash any other way they still dilute us anyway. So it's 6 of one or half a dozen of the other really, whatever they do to raise cash they have to give something in return and while they aren't making a profit from anything it has to be something we own, either shares of a piece of the company.
Quady: "Dilution refers to the value, not how many shares in issue."
Wrong, wrong wrong !
The value can go up or down, the shares in issue are fixed until they are either bought back and cancelled or more are created.
Ask yourself why BHP had a no-dilution clause in SOLG. That's to stop confetti share issues. They can't however stop the movement of the SP which can either increase the value of their share holding or decrease it.
I can't believe how thick you really are when you aren't copy and pasting !
Can someone else tell him ?
https://www.investopedia.com/terms/d/dilution.asp
"Share dilution is when a company issues additional stock, reducing the ownership proportion of a current shareholder. Shares can be diluted through a conversion by holders of optionable securities, secondary offerings to raise additional capital, or offering new shares in exchange for acquisitions or services."
Quady you DO own less of the company, it's just that your share of it is worth the same monetarily.
My argument most definitely does NOT say you've lost money !
read it again.
You have lost 50% of your SHARE of the company because the share count has doubled, but because the shares are still £1 a share your 100,000 shares are still worth what you paid for them.
You said "If you are permitted to purchase one share for every one you own according to you, you have not diluted."
If you are permitted to PURCHASE one share for every one you own you have now spent TWICE as much to own the same percentage of the company. If you don't spend anything then using your statement above you ARE diluted !
I'm not confusing anything
The SHARE price hasn't been diluted.
Your holding as a percentage of the shares in issue has been diluted by 50%.
Please read it again as you read what you wanted to see the last time.
You're wrong Quady,
if the shares are £1 each and there are 1 million shares and you own 100,000 shares you own 10%
If you create 1 million shares of £1 each you may well have 2 million £1 shares in issue and the company may well be worth 2 million pounds but unless they gave you 100,000 shares you would still have 100,000 shares which is now 5% of the shares in issue. You have been diluted by 50% by volume,your OWNERSHIP of the company has halved even though your £100k is still worth £100k if the share price stays at £1 a share.
The company hasn't been diluted because it's theoretically worth twice as much because of the share issue but you own half as much by % so you as a shareholder have been diluted.
There is a difference, if you had a controlling share, say 40% before the share issue, you wouldn't any more.
Hope this helps Ma.
https://www.amazon.com/calculator/s?k=calculator