Yes, a company can technically create a greater number of shares but it will have variously ranging effects on the existing stake holders. Usually, a company creates a greater number of shares after a stock split. As a result of this, the value of the stocks does not get diluted.
Another way is to create some shares and hold the shares in the treasury. Again, this event does not have any notable effect on the value of the existing shares. However, when a company creates shares for the purpose of selling them for an increased funding, the value of the stock holder gets diluted.
Answer Anonymously
Copy Link
