watered stock

watered stock definition - business

watered stock

Stock that is issued with a value considerably in excess of the value of the assets that support it. The term may be derived from the practice of feeding cattle salt to induce them to drink large amounts of water just before they are sold, thereby increasing their weight. Thus, the buyer—whether of stock or of livestock—pays for more than is actually received.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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