Anti-Dilution Adjustment

May 3, 2019 by James Woolfenden

Also called a Ratchet, a mechanism designed to maintain an investor’s percentage shareholding (at no or nominal cost to the investor) if the company issues further shares at a lower price to the one paid by that investor. There are two basic types of Anti-Dilution Adjustment: a Full Ratchet Adjustment and a Weighted Average Adjustment – both of which are defined below.