Liquidmetal Technologies Inc (LQMT)

[Watts Watt]

Question: if a Company purchases shares from its float under a share buyback program, most investors would consider this to be a very positive event as it indicates the Company is making profits enough for the buyback and it increases the percentage ownership of the Company of each shareholder.

No one would ever dispute that raising the PPS of each share owned by an investor is good.

Yet, when the Company does the opposite and increases the float by issuing more authorized, the opposite effect applies to the shareholder: his percentage ownership of the Company decrease and the PPS goes down.

Apart from the argument that dilution is better than bankrupcy, it is not possible to make the case that dilution is better than no dilution.

Of course, many are trying to put a positive spin to dilution.
Fine, no problem. But none of us is forced to buy into either view just because someone says so.

I cite numerous articles linked to this one and none of them say that dilution is a good thing and doesn't hurt the shareholder.
NONE of ThEM.

http://www.investopedia.com/articles/basics/03/030703.asp

Suggest readers make their own conclusion by starting with the above.

In the meantime, I vote for stock buybacks as opposed to the ever so popular stock dilution.

My mind is open and not yet closed on this, but the case most certainly is not closed.