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Technology Stocks : WordCruncher Internet Technologies, Inc. (WCTI)

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To: Jason Riche who wrote (394)12/18/1998 8:15:00 PM
From: RikRichter  Read Replies (1) of 488
 
Dilution has to do with the issuance of new shares to a company's outstanding shares be it through the issuance of new shares in a secondary offering, exercise of stock options, etc.

If a company has 10 million shares outstanding and issues 1 million shares the existing shareholders are diluted by 10%. If that co. was earning $10 million, instead of earning $1.00 per share they would now earn $.91 per share.

In WCTI's case, since the company is yet to be profitable, there is no dilution to EPS except it would reduce the loss per share. I believe that a secondary offering would be very positive in the long term for WCTI to support future growth.

Regards.
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