I swear i should go to work as a consultant to write press releases for companies. Does this action dilute the total # of shares or not ? And if not why the negative reaction to it, is it precieved as insiders wanting to get out ?
This is not dilutive in that is does not increase the number of shares in the EPS calculation.
It does add more supply to the market that can be bought or sold.
There probably will be a road show that will introduce the story to even more potential holders. This could make the secondary a non-event in terms of stock price, but generally this causes some downward pressure and then it corrects.
thanks for the info. it is not yet clear to me whether this is a real dilution or not because it is being sold by existing shareholders. if you look on the yahoo key statistics it is not clear either where the shares are coming from because the shares held by insiders do not add up to 6 million so as usual i am vey confused, its one company in 10 that can write a clear press release. it would seem logical that what ever the answer is that the float will increase by some amount.