Dilution Red Flags — What to Check Before You Trade

Authorized shares 10x+ outstanding shares. Company can issue without shareholder vote.

How to check: Enter the ticker in Intel Terminal and compare authorized vs. outstanding share counts.

New share registration = dilution pipeline being built. Check SEC filings in last 90 days.

How to check: Review recent SEC filings in Intel Terminal or on SEC EDGAR.

Registered shares can now legally be sold into the market. This is the final step before dilution hits.

How to check: Search for "EFFECT" filing type on SEC EDGAR for the ticker.

Conversion price tied to market price with a discount. No floor = death spiral potential.

How to check: Read the convertible note terms in recent 8-K or 10-Q filings. Look for "variable rate" or "discount to market."

Streeterville, Arena, Peak One, etc. in the selling stockholders section. These firms convert and dump.

How to check: Search the S-1 selling stockholders table for known toxic lender names.

Convertible instruments with no minimum conversion price. Unlimited dilution downside.

How to check: Look for "floor price" or "minimum conversion price" language in financing agreements. If absent, assume the worst.

Repeated amendments often mean terms are getting worse for shareholders. Each revision can add more shares.

How to check: Count S-1/A filings on SEC EDGAR. Three or more is a yellow flag turning red.

Prior reverse splits often precede more dilution. Check if this is a repeating pattern.

How to check: Review corporate action history. Multiple R/S events in 2-3 years is a major warning.

Auditor flags company may not survive 12 months. Desperate financing likely follows.

How to check: Search the latest 10-K or 10-Q for "going concern." The Intel Terminal flags this automatically.

Low cash + high burn = forced to raise capital at any terms. The company has no leverage in negotiations.

How to check: Divide cash on hand by quarterly operating expenses. Under 3 months means dilution is almost certain.