Stock Dilution: CNBC Explains

Stock Dilution: CNBC Explains

When stocks are used in transactions or to finance operations, investors in a stock may be worried about stock dilution. What are the effects of stock dilution and how should investors perceive a move that dilutes their shares? Salman Khan explores the topic using a simplified example.

When stocks are used in transactions or to finance operations, investors in a stock may be worried about stock dilution. What are the effects of stock dilution and how should investors perceive a move that dilutes their shares? Salman Khan of the Khan Academy explores the topic using a simplified example.

From this video, you’ll understand:

• The meaning of stock dilution and how it affects shareholders
• Important assumptions when thinking about stock dilution