InterDigital Inc (IDCC)

[The Count]

Stock dividends and dilution

The lowering of EPS due to a proportionate distribution of shares is not dilution IMO. I don't consider stock splits to be dilutive. Yes, EPS will go down, but each shareholder's total earnings for their holdings will be the same. Meaning if you take the number of shares held pre-stock dividend times the "undiluted" earnings, it will be the exact same amount as the post stock dividend shares times the "diluted" earnings.

Dilution is when shareholders suffer a reduction in their ownership, which occurs when shares are issued to others. For example, stock options granted for compensation, stock used to acquire another company or the sale of additional shares to raise capital. That dilutes each shareholder's share of the profits and that is dilution. The shareholders ownership being reduced without selling any shares is dilution. IMO stock dividends and stock splits are not dilutive. And if people want to call it dilutive, it is still not harmful to shareholders.