spp paticipents, what you wish for now??, page-23

Play2Win - only if the profits are expected to increase by 100%.

A fund manager raising funds to invest would not generally suffer dilution as the new funds would be put to work to return as much as the original investments. The profits double and hence the EPS stays the same. As in your example.

A takeover is often in a similar situation where the earnings purchased are expected to increase the overall EPS.

Now take a business that is earning zero profit and is not likely to in the next year or two. And lets exclude very high growth business like Amazon etc. If their expected profit in 3 years time is say $50, then it will be what it is, and the more shares available simply is more way to split said profit, and thus we have dilution.

Thus, in this sort of situation, or in the case of LYC where there is no accounting profit on the horizon until maybe the 2016 year and even then very marginal (REE prices taking off excepted) then Mr Market will price the shares accordingly. Double the number of shares and the SP will reduce by 50% or thereabouts.