Antidilution provision

Antidilution provision is a provision that protects the value of shares held by shareholders from new issues of stocks that are potentially lower that what they paid for. Since new issues of stocks will not increase the total market value of the company, new issues of shares would decrease the value of existing shares held by shareholders. If the total market value of a company is 100 dollars with 100 shares, issuing additional 100 new shares would bring the price of the stock to 50 cents instead of 1 dollar.

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