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  1. Law Glossary

What Is Dilution?

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What Is Dilution?

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Dilution

Dilution refers to the reduction in an existing shareholder’s ownership percentage of a company when the company issues additional shares. Dilution in an IPO results from a disparity between the public offering price in an IPO and the effective cash cost to persons who acquired shares prior to the IPO. Dilution is disclosed in the registration statement in a dilution table.

Visit our Public Company Gateway and our IPO Portal for the latest legal and regulatory developments as well as key checklists, guides, and other pragmatic desktop tools.

Related Capabilities

  • Capital Markets
  • Public Companies
  • Securities, M&A & Corporate Governance Litigation

Resources

The IPO Portal
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