Dilution

Dilution is the reduction in existing shareholders' proportional ownership when new shares are issued. It is a normal consequence of raising equity and becomes abusive when the issuance is structured to transfer value rather than raise it.

manipulation techniques · updated 2026-09-09

Where does dilution come up?

This term is used in the following manipulation techniques, each explained in full on its own page.

• Dilution death spirals — A death spiral is a convertible instrument that converts into stock at a discount to the prevailing market price, so each conversion dilutes holders and pushes the price lower, entitling the holder to still more shares.

Enforcement actions involving these techniques

See also

• Death spiral financing — Death spiral financing is a convertible instrument that converts into stock at a discount to the prevailing market price, so that …
• Float — The float is the number of shares actually available to trade, excluding restricted and closely held stock. A small float makes a …

Terms that refer here

Convertible note · Death spiral financing

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