3 Ultra-Popular Stocks Destroying Shareholder Value
There are a lot of ways to raise money on Wall Street. Profitable businesses can use their operating cash flow to fund day-to-day activities and projects. Meanwhile, profitable and unprofitable companies might have the option of turning to the credit market or taking out a traditional loan with a financial institution to raise capital. But another option exists, and it's not the friend of shareholders.
A common way young or struggling businesses will raise capital on Wall Street is by selling stock (occasionally with accompanying warrants) or issuing debt that can be converted into common stock at some point in the future. While this is often an effective way of putting cash on the balance sheet, it can be extremely detrimental to shareholders if abused over time. A company that's continually issuing common stock threatens to dilute the value of its existing shareholders.
The following trio of ultra-popular stocks are among the market's worst share-based diluters.
Source Fool.com
