Rapid Fire Marketing Inc. (fka RFMK)

[Art Vandeley]

why dilution can be bad for investors is it increases the number of shares that are on the market. For example, if a company initially sells 100 shares and you buy 10 shares you own 10% of the shares. when a company increases the number of shares say to 200, you still only own 10 shares thus now only 5% of the company. You now have half the number of votes, get half the amount of any dividends the company may pay, and the more shares available the less valuable each share becomes. Sometimes dilution is good when the company uses the shares to buy something that increases the value of the company, bad when they are using shares to pay expenses in order to keep the lights on.