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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: amoezzi who wrote (40343)	11/13/2003 2:19:21 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 71105

I have never seen a specific study on the topic. From experience though,if the dilution is small then the price tends to gravitate towards the price of the secondary once it is priced. If the dilution is large then the share price should drop by the amount of the dilution. So a 20 percent increase in shares outstanding should result in a 20 percent drop in the price of the shares. This can be effected by news that changes the outlook of the company's prospects though as stocks are typically priced based on outlook.