Not exact matches
It used the muted
shareholder reaction to the transaction as a pressure point, highlighting opportunity its own bid gave
for liquidity without
shareholder dilution.
Once extraordinary charges and options
dilution are considered, it's not clear that companies actually accumulated much at all
for the benefit of
shareholders, and they sure didn't pay dividends.
However,
for stock market companies, simply creating new shares or issuing stock options by fiat that are given away to employees without the company selling them at full value, existing
shareholders would experience an economic
dilution in profits (dividends) per share going down because of a larger number of shares and, importantly, in economic value, being given away (shares of the company are literally being simply granted to someone else, namely employees).
As noted,
for ESOPs in closely held companies this is not an issue since, typically, the entire company is being sold to the employees, and managers and the exiting owner are not focused on the
dilution of the majority
shareholder since that
shareholder desires to cash out its majority equity.
During Moody's earnings conference call, management addressed
shareholder return items, reiterating that the company would aim
for a modest $ 200 million in share repurchases in 2018 — just enough to offset
dilution from employee share issuance.
I wanted to understand how equity
dilution above or below book value can be good or bad
for existing
shareholders.
Now, I must point out: i) Independent News & Media is currently in the throes of a debt & pension restructuring — this could possibly improve things, but I'm not convinced it's going to be sufficient, and / or
dilution for existing
shareholders might be so bad ultimately the shares might as well be worthless, and ii) I still say my zero valuation
for Continental Farmers Group was about right (God, just look at cash, debt & cashflow in their latest results), but
shareholders are v fortunately getting bailed out by the Saudis at GBP 36p per share.
Problems with initial production have compounded this — these will be solved with time, brains and money, but the funding issue is unlikely to be solved without
dilution for the
shareholders.
Management may have also used the rights offering announcement as a kind of warning; the rights exercise is limited to those holding under 20 % of outstanding shares, which means potential
dilution for a large
shareholder seeking to get greater control.
I'm not sure this is the best solution and I'm a bit worried that management may decide they need a larger sandbox to play in, i.e. larger capital base, which could mean
dilution for existing
shareholders.
Yes, they might be able to access an equity facility
for more cash, but that just accelerates the relentless
dilution process
for existing
shareholders.
Which is fair warning
for management... and
shareholders: Personally, I'd be extremely wary of further dilutive placings — it would indicate management is dead - set on scaling - up the balance sheet, regardless of any implied cost /
dilution.
I am fine with that, the issuance of shares to pay dividends led to a
dilution for existing
shareholders, the flipside is that there is a witholding tax on cash dividends from Royal Dutch Shell of 15 %, so my income from that wonderful company will be lower than in the previous year (it was around USD 600 in 2017 and will be around USD 500 in 2018).
«Don't be fooled, there's only one way this ever works out: Zero value or absolutely massive
dilution for shareholders.
And one that will surely result in significant
dilution for existing
shareholders.
Mr. Market might have thought these were newly issued shares and this would mean
dilution for existing
shareholders.
On the other hand, Kenmare Resources (KMR: LN) remains a dodgy prospect, despite the collapse of its over-valued share price & even with a potential bidder still lurking in the wings — a debt default and / or a major
dilution are now looming risks
for existing
shareholders.
2) Management and the Board added a second provision
for shareholders to vote on in its proxy vote
for the Raven merger — a new option pool that equated to 22 % new
dilution to VaxGen
shareholders, not including any new
dilution from the proposed Raven merger.
-- We're also disappointed to see this share issuance implies a 4.2 %
dilution (of NAV per share)
for existing EIIB
shareholders.
And if it actually does, how much
dilution & leverage would that imply
for current
shareholders?
Despite Elon Musk's showmanship during the unveiling of the «Solar Roof» as justification
for Tesla
shareholders to accept a huge
dilution by merging with debt - ridden SolarCity, the hyped product already looks dead - on - arrival.