Securities or corporate actions that would increase earnings per share if converted or exercised, opposite to dilutive effects. Anti-dilutive securities are excluded from diluted earnings per share calculations to avoid overstating profitability.
From Greek 'anti' (against) and Latin 'dilutus' (weakened, thinned). This accounting term emerged in the 1960s as stock options and convertible securities became common, requiring precise rules for earnings per share calculations.
Anti-dilutive is like having a magic coupon that actually makes your pizza bigger instead of smaller - if exercising stock options at $50 per share would increase earnings per share when the stock trades at $40, those options are anti-dilutive and ignored in calculations. It prevents companies from artificially boosting their reported earnings!
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