Gen 2 Technologies Inc (MNIZ)

[double_m]

Dilutive Secondary Offerings

A dilutive secondary offering, also known as a follow-on offering or subsequent offering, is when a company itself creates and places new shares onto the market, thus diluting existing shares. This type of secondary offering happens when a company's board of directors agrees to increase the share float for the purpose of selling more equity. When the number of outstanding shares increases, this causes dilution of per-share earnings. The resulting influx of cash is helpful in achieving the longer term goals of a company or it can be used to pay off debt or finance expansion. Some shareholders shorter-term horizons may not view the event as a positive.

A dilutive secondary offering usually results in some sort of drop in stock price due to the dilution of per-share earnings, but markets can have unexpected reactions to secondary offerings. For example, in January 2018, the stock price of CRISPR Therapeutics A.G. saw a one-day increase of 17 percent after the company announced a secondary offering. Although the exact reason for the rapid increase can't be known for sure, analysts suspect it was because investors thought the announcement signaled something greater in the future, perhaps related to the company's plans to use the additional capital to fund further clinical development.

https://www.investopedia.com/terms/s/secondaryoffering.asp