Anavex Life Sciences Corp (AVXL)

[frrol]

Yes "dilution" is not an absolute determination. Ie, it is not as simple as dilution = shares being issued. Dilution had to do with shareholder value. To avoid finance theory and math and illuminate the point with a spotlight, I'll just give a ridiculously stark example. What would be more "dilutive": (A) issuing one share of stock for $100MM, or (B) signing a license deal that gives you $1 in up front payment and 1% of net revenue.

(A) means you're issuing stock. But it would be clearly less dilutive to shareholder value.

There is no free lunch in economics, which includes finance. You have to weigh relative values and choose. Issuing stock (at whatever given price) has to be weighed against the terms of a licensing deal (potential or actual). The difficulty lies in the fact that licensing deals have huge unknowns. But then you would be sharing those risks. There are finance equations for evaluating and weighing the choices, using probabilities for the unknowns.