Share-count increase, relative ownership dilution, capital raised, price transfer and static EPS effects.
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Share Dilution Calculator
Calculate how a placing, primary follow-on offering or other new share issue changes the share count, a non-participant's ownership and the denominator-only EPS arithmetic.
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Existing and new shares, your holding, issue price, current price and current EPS for the denominator illustration.
Whether the proceeds earn an adequate return or repair the investment case.
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Change any fieldIssue terms
02
Public-company basisDilution output
- Post-issue shares
- 120,000,000
- New shares / existing shares
- 20.00%
- Relative ownership dilution
- 16.67%
- Your ownership before
- 0.0100%
- Your ownership after, if you do not participate
- 0.0083%
- Shares needed to maintain stake
- 2,000.00
- Gross capital raised
- £40,000,000.00
- Discount / (premium) to entered reference
- 20.00%
- Cash-adjusted theoretical price
- £2.4167
- Theoretical per-share price change
- -3.33%
- Illustrative holding-value change, no participation
- −£833.33
- Pro-forma EPS, unchanged earnings
- £0.1667
- Mechanical EPS change
- -16.67%
The cash-adjusted price assumes gross proceeds remain worth one-for-one inside the company and ignores fees, tax, signalling, market reaction, earnings from the new capital and other securities. The EPS illustration infers unchanged earnings from the entered EPS and pre-issue share count; it is not reported IAS 33 EPS. Ownership dilution is not the same as value destruction.
The decision after the calculation
More shares means dilution. It does not settle whether value was created.
The new issue reduces a non-participant's relative ownership by 16.67%. The real question is whether the capital raised can earn enough—and arrive on fair enough terms—to offset that dilution.
What will the new capital fund?Is the discount transferring value?Does the balance sheet improve enough?
How it works
Count the new claims. Then ask what they bought.
- Use basic ordinary shares outstanding before the transaction, excluding treasury shares.
- Enter the new primary shares, not shares merely sold by an existing holder.
- Keep the reference and issue prices in the same currency unit and use a clearly dated reference price.
- Read ownership, price and EPS outputs separately; they measure different things.
Listed-company dilution mechanics
A 20% increase in shares is not 20% ownership dilution.
If 20 new shares are issued against 100 existing shares, the enlarged company has 120 shares. A non-participant's relative ownership falls by 16.7%, because the new shares are 20/120 of the post-issue total.
Ownership dilution
For a non-participating holder, relative ownership dilution is new shares divided by the enlarged share count. It assumes the old and new shares carry identical economic and voting rights.
Share-count increase
New shares divided by pre-issue shares answers a different question: how much the denominator grew. Both percentages are useful, but they should not be given the same label.
Theoretical price transfer
The cash-adjusted price adds gross proceeds to the pre-issue equity value and divides by post-issue shares. It illustrates discount transfer; it is arithmetic, not a market-price forecast.
EPS denominator effect
The pro-forma EPS output infers earnings from the entered EPS and pre-issue share count, then holds those earnings constant for a full period. It ignores the weighted-average denominator used in reported EPS, timing, interest savings, acquired earnings, tax, fees and returns earned on the new cash.
Primary versus secondary shares
A primary issue increases shares outstanding and raises issuer capital. A sale of existing shares by another holder does neither. Mixed offerings need the primary component isolated.
Fully diluted is another calculation
Options, warrants and convertibles belong in a clearly defined as-converted scenario. This calculator deliberately uses the basic announced share count.
Method basis. The EPS illustration follows the unchanged-earnings denominator logic rather than claiming reported accounting EPS. IAS 33 uses weighted-average ordinary shares and has separate rules for potential ordinary shares and rights issues. See the official IAS 33 text. Always reconcile the exact share count and transaction type to the issuer announcement.
From dilution arithmetic to capital allocation
The denominator changed. The thesis may have changed more.
Alpha connects the financing terms to balance-sheet risk, management's use of proceeds, valuation, sizing and portfolio fit.