East,
At first glance it would appear that what you are saying is corrrect. However, IF you look closer, that is not actually the case when the company is diluting the shares on a rather consistnet basis.
See, 1) shareholder buys shares at certain price,
2) Company need funding for some kind of situation - acquisition, pay down of debt, lawsuits, R&D.
3) Company goes to IBs in a PP or goes to the company they are acquiring, or in some other funding deal and says I'll give you x number of shares that you can sell down the road - now, they have essentially just used my money to get liquid money in their coffers to operate on.
4) Now, a portion of my money is in another entity's hands to be sold for THAT entity's profits well before I will ever see my share price appreciate, because it is so typical that these shares are given away at a very sizable discount to the market price that I am sitting at waiting for some appreciation of my investment. This is the DILUTION FACTOR, that so many shareholders tend to ignore. That is basically the company TAKING OUR MONEY. I have not sold to any other shareholder, but some of my investment has been converted into shares that some other shareholder now owns and that can sell fairly soon and then make my share price continue to go down rather than up - because again, they got those shares at a major discount to what I paid for my shares when I bought on the open market.
Quite different than the impression that you represented.
