Share Dilution Matters, but What About the Total Number of Shares?

Does the total share count matter for returns? I am seeing a lot of people talk about share count.

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[russellditchfield-agboh]

Very helpful content.
Paladin diluted shareholders in the past and they have over 2 Billion shares outstanding. I’ve been thinking that was bad and it’s held me back from significantly loading up when they were cheaper investing. This helps, I won’t be making that mistake again

[sagig]

Good video and good topic. Here is how I would put it: Share dilution is essentially the company raising money. They can raise money thought debt or through issuing shares. Sometimes it makes sense to finance by dilution if the price of debt is too high. The real point is what the money is raised for. If it's raised to keep the company afloat (like return interest on debt) then it's a very negative sign. If it's used to grow, by means of investing in a new production line, increasing produced volume - then it may be a good sign. In commodity companies I would suspect it's mostly a negative sign . For Tech companies this many times is a good sign cause they are expanding by creating new technologies. But for commodities, since the primary money maker is normally known in a deposit in the ground somewhere, and no new mining technology is normally coming around, then usually dilution will not be done to expand, but to keep afloat, in which it's a negative sign. Looking at the stocks balance sheets, as well as free cashflow, also learning about debts ratios and a company's price of debt - is key in all of this. Thanks for the video Andy.

[edwardferry]

Great advice again,
If a Mcap is extremely undervalued, it is not unknown for the SP to rise before the placing is priced.
In a bull market the Junior company is able to play several interested Institutional Investors against each other for improved terms.
However, the general message of timing your share purchase with regards to dilution is very important for inexperienced investors to be aware of.

[zlatanstevic]

Thank you. Insightful. This was one of the concerns I raised when acquired shares of Boss Energy (BOE).

[bozolito]

It’s not true the Bannerman needs $800 million to go into production. That is only one of many options. There are several lower cost options to get started right away. In addition there is buyout options and offtake agreements as well. Brandon Monroe is all over YouTube discussing this on crux investor

[drooyrich]

What do you think of the oil platform companies ?

Like Valaris, Noble corporation and Diamond offshore ?


They have no debt now .. business is still running .. and their stock is dirt cheap ..

[fiayang]

Hi Andy,
One of the companies I own is diluting their shares right now. I´m thinking to sell mine ASAP. Not a good sign.