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LSDefine

Simple English definitions for legal terms

watered stock

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A quick definition of watered stock:

Watered stock is when a company gives someone stock in exchange for something that is worth less than the stock. This used to be a big problem because investors relied on the value of the stock, but sometimes the company's actual value was less than what the stock was worth. This doesn't happen as much anymore because most stocks don't have a set value.

A more thorough explanation:

Definition: Watered stock refers to stocks that are issued by a company in exchange for assets that are worth less than the value of the stock. This practice was more common in the early 20th century when investors relied on the par value of stocks to determine their worth.

For example, if a company issued 100 shares of stock with a par value of $10 per share, the total par value of the stock would be $1,000. If the company then traded assets worth only $500 for those 100 shares of stock, the stock would be considered "watered" because the assets received were worth less than the par value of the stock.

When stocks were "watered" in this way, investors could be misled into thinking that the company was worth more than it actually was. This could lead to financial losses for investors if the company's true value was revealed.

Today, watered stock is less common because most stocks have a very low par value or none at all. This means that the value of a stock is not tied to its par value.

Waste | Watkins v. United States (1957)

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MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
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