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by yapcguy 4523 days ago
> Stock based compensation still costs investors money.

Hi, could you expand upon this, perhaps with an example? Thanks.

1 comments

When the company floats they release a given amount of stock to the market.

If they then also release stock to pay their employees then the total stock in the market goes up.

If the total number of stock (i.e. shares) goes up but the company profits go and the money in the bank (and other assets) also goes down then the value of each of those individual stock items will also be going down.

Hence the drop in the share price.