Capitalization Change

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DEFINITION of 'Capitalization Change'

A modification in the issued and outstanding securities of a company. Capitalization changes occur either through the issuance of additional shares or the repurchase or cancellation of existing shares. This can have a dilutive or accretive effect on a company's market capitalization, depending on the scenario.

INVESTOPEDIA EXPLAINS 'Capitalization Change'

A company will go through a number of capitalization changes as it progresses from a start-up to a successful business. The most dramatic capitalization change for an individual company may often occur at the initial public offering stage, when it makes the transition from a private entity to a public issuer. Moreover, changes in capitalization frequently arise as the result of certain corporate activities such as a stock buyback or an acquisition.

RELATED TERMS
  1. Outstanding Shares

    A company's stock currently held by all its shareholders, including ...
  2. Capital Stock

    The common and preferred stock a company is authorized to issue, ...
  3. Share Capital

    Funds raised by issuing shares in return for cash or other considerations. ...
  4. Capitalization

    1. In accounting, it is where costs to acquire an asset are included ...
  5. Market Capitalization

    The total dollar market value of all of a company's outstanding ...
  6. Dilution

    A reduction in the ownership percentage of a share of stock caused ...
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