[stinkypete]

think about it this way.

you own 10 shares out of 100. the company is worth $10 mil. your shares are worth $1 mil.

now the company decides they need $2 mil to develop a new product. they decide to sell more shares. to get $2 mil, they sell 20 shares. but now the total value of the company is $10 mil + $2 mil (in reality, probably more, since the new project should increase the company's value by more than the investment).

so now you own 10/120 shares of a $12 mil company. your shares are still worth $1 mil+.

so while you own a smaller percentage now, the company is worth more which should (more than) make up for your reduced stake.