RE: SAVVY & PEAKHOPE3 May 2022 22:04
Castle - I’m not qualified to give advice and neither are you !!
KEY TAKEAWAYS
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.
When a company issues new stock, it is usually in a positive light, to raise money for expansion, buying out a competitor, or the introduction of a new product.
Current shareholders sometimes view dilution as negative because it reduces their voting power.
Diluted earnings per share is a way to calculate the value of a share after convertible securities have been executed.
The if-converted method is used to calculate diluted EPS if a company has potentially dilutive preferred stock.
The Treasury stock method is used to calculate diluted EPS for potentially dilutive options or warrants.