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Capital One Financial Corporation Message Board

  • second_alias_bureau second_alias_bureau Sep 26, 2008 8:01 PM Flag

    Those of you screaming dilution

    About this second offering are off the mark.

    These are not shares just added to the current pool of cash. They are shares that have been added, but they are also bringing in capital when they are bought.

    You kool-aid drinkers will appreciate this analogy.

    Let's say you have a pitcher of kool-aid... so much sugary mix, so much water. Okay, are we together?

    In order to dilute the current pitcher of kool-aid, we would have to add something dilutive, like water to make the mix weaker.

    We are not adding water to the current pitcher without adding more sugary mix along with it.

    Sure, shares are being added to the float, but along with them come more money.

    The shares are being bought, but the seller is Capital One, not a current stock holder. There is no dilution...

    The mix is just the same, the pitcher just got bigger. There is NO DILUTION with this second offering!

    Wake up people!

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