It is important to realize that not all dilution is created equally. Dilution isn't harmful when the new investors pay more than existing investors because the capital markets are saying that each share has become more valuable when new investors are willing to pay a higher price to get a piece of the action.
When companies like Twitter need more capital to grow their business, they can issue more shares. When Twitter does its IPO to raise $1 billion of cash, the original shareholders will be "diluted" (own a smaller percentage of Twitter). That would be a very positive event for the original owners who may have paid a dime a share, whereas the investors in the IPO will pay about $17 per share. This is healthy dilution where the original owners can realize a $16.90 gain on an investment that they paid a dime for.
Before NEOM ran out of shares in July, the problem was death spiral dilution since YA had the ability to purchase shares (through conversions) at a price that was always lower than what current retail investors were paying. And to top it off, YA had the right to purchase a virtually unlimited number of shares on those terms.
NEOM was the exact opposite of a "wealth creation mechanism" for retail investors because the supply and demand of shares mismatch combined with the dismal financial performance of NEOM kept driving PPS down. When investors see PPS drop 99.9% they start to learn the lesson that they are not in a good place investing in NEOM.
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