What is mean by dilute of share?

Dilution of shares refers to the reduction in the ownership percentage of existing stockholders of a company. This occurs when the company issues new shares, either through an initial public offering (IPO) or later through secondary offerings. As the number of outstanding shares increases, each existing stockholder's ownership percentage decreases, resulting in a smaller, or diluted, percentage of the company. This can make each share less valuable and affect the company's earnings per share (EPS) and stock prices.

Dilution can be a concern for investors and can impact the value of their investment. It's important for companies to manage and communicate dilution effectively to ensure transparency and maintain investor confidence.