Share Dilution
See what a new share issue does to your percentage ownership.
How to use it Enter existing and new shares in millions, then your own holding in whole shares. Add any shares you subscribe for. Optional prices show a simplified cash-issue illustration.
Relative ownership dilution
- Your ownership before
- 0.1%
- Your ownership after
- 0.08%
- Total shares after issue
- 125,000,000
- Your shares after issue
- 100,000
Cash-issue illustration
- Gross company proceeds
- £8,000,000.00
- Theoretical ex-issue price
- 38.4p
- Theoretical price change
- -4%
- Cost of your new shares, before fees
- £0.00
A smaller ownership percentage does not automatically mean the share price falls by the same amount.
Why it matters
A 20% reduction in ownership doesn't automatically mean a 20% fall in the share price.
A company with 100 million shares issues another 25 million. A non-participating holder of 100,000 shares moves from 0.1% to 0.08% ownership: 20% relative dilution, not a 20-percentage-point fall.
How it's calculated
Ownership after = (your old + your new shares) ÷ (company old + company new shares)
Relative dilution = [1 − (ownership after ÷ ownership before)] × 100
New shares you subscribe for must already be included in the company’s total new issue. For the optional cash-issue illustration: theoretical price = [(old shares × current price) + (new shares × issue price)] ÷ total post-issue shares. That combines the old market value with gross new cash.
Assumptions & limitations
Assumes ordinary shares with identical rights and a simple cash issue. Excludes transaction costs, warrants, convertibles, differing rights and changes in the underlying business value. The theoretical ex-issue price is not a forecast. New cash can support value even where ownership is diluted. Share totals must resolve to whole shares.