Dilution is a claim often used to disparage a company's stock but, more often than not, the word is used incorrectly and indiscriminately and only scares unwitting shareholders. Dilution means a company is issuing new shares. There is no evidence that PNTV has done this. If Mark sold any of his shares...
1.) he'd have to report it with an SEC filing
2.) it wouldn't be dilution since the shares he owns are already part of the OS (Outstanding Share) count, i.e. they've already been issued.
If a company dilutes (issues new shares) it decreases the percentage of ownership of each shareholder, thus the value of your shares goes down since you own a smaller piece of the company. However, if the company issues new shares to purchase an asset like another company. The value of the company goes up so you would own a smaller piece of a larger pie. Consequently the value of your shares can go up instead of down if the asset that's purchased is worth more (e.g. brings in more profit or book value) than the stock that was issued.
Shareholders must keep in mind that not all share issues are dilutive. If a company issues $10 million worth of its shares to buy another company that's worth $12 million, it actually adds $2,000,000 to the value of the company. This is called accretion as opposed to dilution and increases the value of each share. If a company issues shares to do a merger or acquisition that brings in more value than the value of the shares issued, then it is not dilution but accretion of shares. The value of each of your shares increases. For example, if you buy a million dollar home at auction for $600,000 cash, you've actually increased your net worth by $400,000, but if you pay $1.2 million your net worth would go down by $200,000. It's the same principle with your shares.
Again there is no evidence that PNTV has issued any new shares (i.e. diluted its stock). Anyone who is blaming this recent pps action on dilution is misinformed.
