how can warrants dilute earnings per share eps 
earnings per share eps is a key metric followed by investors and analysts it is computed as a company s net income for a certain period divided by the number of shares outstanding warrants however can have a dilutive effect in that these contracts represent potential new shares that are not yet available therefore fully diluted eps is often preferred which takes into account all potential new shares that could be brought about through warrants other employee stock compensation and convertible securities investopedia does not provide tax investment or financial services and advice the information is presented without consideration of the investment objectives risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors investing involves risk including the possible loss of principal 