How would a dilution affect the stock price of CCIV?

Asked 4 years ago

Hi, I've started trading and investing in stocks not too long ago. I've got Churchill Capital and I heard that there will be dilution. What is dilution? Is dilution bad for stocks? How will it affect the prices? Thanks guys!

Andrew Moran

Thursday, July 15, 2021

Share dilution is a common practice for companies. 
The more shares are diluted, the greater the odds for the stock price to decline. Even if the firm's market capitalization rises, share dilution can lead to stock prices trending lower.
On the one hand, this can be bad news for shareholders. On the other hand, it could be beneficial for investors in the long term, especially if the company spends the funds raised by selling the new shares in a productive and efficacious way.
That said, for the most part, investors are rarely pleased when a business dilutes shares, including among companies that just went public.