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Anti-Dilution Protection

Anti-Dilution Protection

  • Term

    Main definition

  • Anti-Dilution Protection

    In a contract or instrument that defines the terms of a security, such as an option, warrant, or convertible security, the anti-dilution protection would protect an owner of the security or investor in the security from dilution of its ownership interest due to future issuances and sales of capital stock by the company that is the issuer of the security.

    For the mechanisms providing for adjustments to counteract dilution and maintain percentage ownership, see Weighted Average and Full Ratchet.

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