Overcapitalisation (Noun)
Meaning
(business) too much capitalization (the sale of more stock than the business warrants).
Classification
Nouns denoting acts or actions.
Examples
- The company's overcapitalisation led to a significant dilution of shareholder value and a subsequent decline in stock price.
- Analysts warned that the startup's overcapitalisation would make it difficult to achieve a sustainable return on investment.
- The business's overcapitalisation was evident in its bloated balance sheet, which showed a disproportionate amount of equity compared to assets.
- The company's decision to issue more shares than necessary resulted in overcapitalisation, putting pressure on management to deliver unrealistic returns.
- Regulators scrutinised the company's overcapitalisation, suspecting that it was a deliberate attempt to inflate the stock price and deceive investors.