Definition, Meaning & Synonyms

dilutive

adjective

/dɪˈluːtɪv/

Definition

Related to or causing a reduction in the ownership percentage of existing shareholders due to the issuance of new shares.

Examples

The company’s decision to issue additional stock was viewed as dilutive to current investors.
When a company undergoes a dilutive event, shareholders may find their voting power diminished.
Investors often worry about dilutive impacts when a startup raises new funding.

Meaning

Dilutive refers to the effect of new shares being issued by a company which decreases the existing shareholders’ proportional ownership, potentially lowering the value of their shares.