A stock representing ownership in a corporation that is worth less than the actual invested capital, resulting in problems of low liquidity, inadequate return on investment, and low market value. Bloomberg Financial Dictionary
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Shares which represent overvalued assets, usually because of inflated accounting values. Derived from the practice of giving cattle water before they were weighed in at the slaughterhouse.
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watered stock UK US noun [C or U] US FINANCE
► in the past, a company's shares that were shown in its accounts at a higher value than a company’s real assets, used to deceive the authorities and possible investors: »
This is an industry which has never issued watered stock.
Financial and business terms. 2012.