ANTIDILUTIVE

A term which describes the effects of corporate actions(acquisitions made through the issuance of common stock or other securities for example), securities conversion or securities retirement on earnings/common share (EPS), where the EPS is higher for shareholders.

A transaction is regarded to be antidilutive in case its effect is for the increase of the EPS amount, either by increasing earnings or lowering the share count.

Another use of the terms points to ownership rights, whereby current shareholders in a specific class of shares possess rights to buy additional shares when a new issuance of securities emerge that would in effect reduce the ownership percentage of current holders. It is referred as an anti-dilution provision.