From today’s email:
The effect of passing these resolutions means that all existing shareholders, including Crowdcube Nominees who hold the shares on your behalf, could be diluted proportionately from 5.26% to 4.10%.
Do I understand this correctly in thinking it says that the number of shareholders will reduce from 5.26% to 4 .10%.
I’ve read clearer announcements!
I think it just means that new investment reduces existing shareholders proportion (since we haven’t had a chance to invest in this round. It’s explained here:
When companies issue additional shares, it increases the number of common stock being traded in the stock market. For existing investors, too many shares being issued can lead to share dilution. Share dilution occurs because the additional shares reduce the value of the existing shares for investors.
For example, let’s say a company has 100 shares outstanding, and an investor owns ten shares or 10% of the company’s stock. If the company issues 100 additional new shares, the investor now has 5% ownership of the company’s stock since the investor owns 10 shares out of 200. In other words, the investor’s holdings have been diluted by the newly issued shares.
(How Does Additional Equity Financing Affect Existing Shareholders?)