Probably easiest to explain with an example.
Say you own 10 shares in a company that has 100 shares in total i.e. you own 10%.
If a new placement gives 20 new shares to a new investor then you still have 10 shares, but you only own 8% of the company (10 / 120).
Therefore, your shares are now less valuable as you % of ownership of any profits is reduced.
Makes sense?
Ann: Funding Package, page-35
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Last
$10.00 |
Change
-0.150(1.48%) |
Mkt cap ! $211.3M | |||
| Open | High | Low | Value | Volume |
| $10.26 | $10.35 | $9.80 | $295.8K | 29.56K |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 22 | $9.87 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $10.00 | 2758 | 1 |
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