What Is Share Dilution?

By Jeremy Bowman – Updated Apr 9, 2025 at 11:17 AM

Key Points

Share dilution decreases value per existing share by adding more shares to the market.
Earnings per share lower post-dilution, impacting investment value negatively.
Investor awareness of SBC and secondary offerings' impact is crucial for decision-making.

Share dilution is an important concept for any investor to understand. While revenue and profits are key, what ultimately counts is the value on a per-share basis. That's where share dilution comes in. The number of shares outstanding for publicly traded companies tends to vary from quarter to quarter, depending on whether a company repurchases shares or dilutes existing shareholders.

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Pile of stock certificates. — Image source: The Motley Fool.

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.