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 2026-09-08
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.
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 …