future earnings dilution issue. The fact that PZN is issuing new shares to HSBC only dilutes your investment to the extent that HSBC pays less per share than you paid.
For example, (I apologize for the simplistic example; I need things to be simple)if you and I start a business with each of us putting in $1 million and each of us having one share we each own 50% of a business that has a net worth $2 million. If we allow in two additional shareholders each putting in $1 million and each getting one newly issued share, You now own 25% of a business worth $4 million, same as before.
This example assumes the additional $2 million put in by our partners will generate the same returns to our business as our original $2 million did.
If the marginal returns on newly invested capital equals our previous returns and if we sell equity at the same cost we paid there is no dilutive effect.
New shares get issued, but FFO/Share (EPS) goes up too. That is because shares are sold for $$$, and the weighted cost to PZN for selling these shares is 10%. They then put the $$$ to work at a 20%+ return, which is good for us shareholders. I only wish the stock would trade up to a fairer value in the $30 range, so it costs PZN less to sell the shares. My opinion.