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Stock dilution

Stock dilution occurs when more shares are added to the pool of stock (outstanding shares) that is already trading in the open market. You can think of it like how the U.S. government prints money which increases the total number of dollars in circulation which lowers the value of the dollar. Instead, it’s the company that “prints” money, or in this case, stock, which lowers the value of their stock and increases the total number of outstanding shares.

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