SBC Dilution
The percentage reduction in existing shareholders' ownership stake driven by the share issuance associated with stock-based compensation, expressed as an annual rate. Gross SBC dilution equals SBC expense at grant-date fair value divided by market capitalization. Net dilution subtracts the buyback offset (buyback dollars divided by market cap) over the same period. Net dilution is the per-share return drag that existing shareholders absorb each year; a 3 percent net dilution is the difference between a 5 percent revenue-growth business and a 2 percent per-share growth business, which materially alters the valuation case. SBC dilution is the load-bearing economic concept the cash flow statement does not directly disclose.
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Related terms
Accounts Payable · Adjusted EBITDA · Adjusted EBITDA Ex-SBC · ADR · ARPU · Average Length Of Stay
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