SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : All American Food Group(AAFG)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: WEBNATURAL who wrote (332)8/30/1998 9:42:00 PM
From: Mr. Jens Tingleff  Read Replies (2) of 618
 
Exactly what I want Loren to realize: Dilution of earnings and voting power comes from going from adding more common stock shares with no change in stock value or earnings.

Key words are "Stock value" and "Earnings"

Earnings : It has been announced that cost have been cut with 60% - Meaning improved earnings.

Stock value : Selling 2MM+ shares bring in a certain amount of money - That goes in first instance into cash balance - Cash balance is a part of stockholders equity - Alternatively the company could take a loan to get that cash needed for growth - But due to the fact that loans in most cases are more expensive, the loan will create dilution.

What is the essence of this: Don't cry dilution when shares are issued - At least not until you really know where the money goes !.

As an example of this: I just made a calculation on an acquisition today where the acquiring company got 4 times their normal stock price worth of stock from the other company.

For the voting power - Yes it's diluted with every share issued - But then again with voting - who are we (in most cases) to tell any professional management how to run their line of business. And in a lot of companies (as in this one I believe) the REAL float does not allow common investors the majority vote.

Kr
Jens
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News