Share dilution

Where it comes from

Buybacks work in the other direction

A worked example

A company whose share count rises 3% a year for a decade leaves an unchanged holding owning roughly a quarter less of the business.

How we use it

Dilution Control is 20% of Capital Returns Intelligence and is measured on the multi-year net change in shares outstanding, drawn from filings.

Related terms

• Buyback
• Earnings per share
• Free cash flow

Keep reading

• Investing Glossary

  Every investing term we use, defined once and in plain English — from compounding and drawdown to Form 13F and share dilution.

• Compound interest

  Compound interest is growth earned on both your original money and on the growth it has already produced. It is the reason long holding periods matter more th

• Dollar-cost averaging

  Dollar-cost averaging means investing a fixed amount on a fixed schedule regardless of price. It removes the need to decide when to invest, and it buys more s

• Free cash flow

  Free cash flow is the cash a business has left after paying the costs of running and maintaining itself. It is the cash that can fund dividends, buybacks, deb

• Expense ratio

  An expense ratio is the annual percentage of your money a fund keeps to run itself. It is deducted from returns quietly, every year, whether the fund performs

• Maximum drawdown

  Maximum drawdown is the largest peak-to-trough fall an investment has suffered over a period. It measures the worst stretch an investor would have had to sit