"They said they wouldn't raise equity, but they did, " he said, adding that both former CEO Josef Ackermann and Mr. Jain had expressed concerns about diluting shareholders in the past.

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That makes its stock price go up and enables it to buy more stuff without diluting existing shareholders.

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Hopefully, going forward both MMR and EXXI will stop diluting their shareholders to keep funding their growth.

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Such firms are not using buybacks to distribute profits but to avoid diluting existing shareholders when they grant employees options on new shares.

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Both will be welcome at MMR which has bootstrapped itself for many years to develop this Ultra Deep play by selling a lot of stock and diluting early shareholders.

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Petrobras has been a laggard since late last year, when the government issued millions of new shares, diluting existing shareholders, and giving the government a slightly larger stake in the company.

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Some of these issues include outrageous compensation that flowed from generous options grants, cheap loans to executives for exercising options and the notion that options policies, especially for tech companies, were massively diluting current shareholders without showing the true cost, save a footnote in a company's annual report.

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In a recessionary economy, raising capital is expensive and not easily done without diluting the existing shareholders, especially in smaller community banks where access to the capital markets is difficult or non-existent.

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Option grants reduce the wealth of other shareholders by diluting their stakes in the company.

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