Wednesday, March 14, 2012 1:20:55 AM
Value dilution describes the reduction in the current price of a stock due to the increase in the number of shares. This generally occurs when shares are issued in exchange for the purchase of a business, and incremental income from the new business must be at least the Return on equity (ROE) of the old business. Exactly what happened here.
It is obvious that most people on this board have never owned a business. Company's go public for a reason, to raise money! Try going and getting conventional financing for a business today, they will laugh you out of their office. Most legitimate pink CEO's have gone public out of nececessity and alot have regretted it, but their options are slim and none and mostly none. You are right on Wallstreet! BCAP
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