Corporations have two routes open to them in order to raise capital: 1) they may sell debt paper (bonds) or 2) they may issue equity (shares). Although I do not follow drop, and would have to do some research as to why the company needs to raise additional capital through a secondary offering, more than likely, they need the funds to pay down debt and continue development and research. A study of their balance sheet should be most informative to you. Also, if this is a public offering ( which I don't know), as opposed to a private placement, a prospectus issued to any interested purchaser, would also reveal the proposed allocation of the funding. Thus, although from the corporations stand point, more funding will be available to them, from a shareholders perspective, your ownership percentage is being reduced by this "watering down" process. However, the desire to survive is a very strong amongst humans as well as corporations. Hope this gives you a little more understanding of the procedure. GLTU.
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