Stock dilution | Stocks and bonds | Finance & Capital Markets | Khan Academy

Courses on Khan Academy are always 100% free. Start practicing—and saving your progress—now:

Why the value per share does not really get diluted when more shares are issued in a secondary offering. Created by Sal Khan.

Watch the next lesson:

Missed the previous lesson? Watch here:

Finance and capital markets on Khan Academy: When companies issue new shares, many people consider this a share “dilution”–implying that the value of each share has been “watered down” a bit. This tutorial walks through the mechanics and why–assuming management isn’t doing something stupid–the shares might not be diluted at all.

About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We’ve also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.

For free. For everyone. Forever. #YouCanLearnAnything

Subscribe to Khan Academy’s Finance and Capital Markets channel:
Subscribe to Khan Academy:

Related Posts

31 thoughts on “Stock dilution | Stocks and bonds | Finance & Capital Markets | Khan Academy”

  1. Fantastic. Exactly what I wanted to know and in a short video. I wasn't thinking about the money being given to the company in exchange for the new shares and how it raises the company's value.

  2. I’m a beginner, I will advise you all not to be convinced by scammers, my best recommendation for you is to get in contact with the only honest man that helped me with a good strategy to trade and earn which I’m enjoying now contact him politely on
    ✅He is the number one☝?trader I know , he is reliable and trustworthy he helped me for free with a 1-on-1 master class

  3. Great video, Stocks investment is actually the best so far what you need is a professional advice on the right stock to invest and either long term or short term what you need is a professional advice and you would be making profit rather than making self guesses and making losses, i have been able to earn up to $25,000 weekly from stocks trading investment. For information how its possible to earn feel free to drop a Dm on whatsapp +44 7451 286034‬ now..

  4. So in other words you buy shares to get ownership of the company, unless the board decides they want to issue more shares so that you own less… despite you having paid money for that ownership. Okay then, you keep your useless shares and I'll keep my money.

  5. How does a corporation know the limit of the number of shares that is demanded by the market? If it issues too many shares then won't it hurt its own stock price or even turn into a South Sea Bubble or a Mississippi Scheme?

  6. If i wanted to kick out a shareholder in my company who is refusing to leave, and i am the majority share holder in that company (UK company), can i dilute the shares to a point where it becomes worthless ? (ie creating more shares without bringing in an investment)

Comments are closed.