Watered Stock

See: Dilution.

In the Old West, it would mean your cattle had plenty to drink. But those goldarn city slickers have a different meaning for it. For them, it's an asset with an artificially inflated value.

Actually, we can stick with the cattle theme for a second, because that's where there term originated. Imagine you're a cattle rancher and you sell your heifers by weight; the heavier they are, the more money they bring in. So before shipping them off to slaughter, you force-feed them water...keep filling them up until they almost burst. Then, when you weigh them for sale, you get paid on that extra water weight. Watered stock.

In Wall Street terms, we're talking assets like stocks. The term "watered stock" usually refers to illegal activity. It's not just that a stock might be overvalued in your opinion, like, "Netflix is trading at $370, but I think a fair price is more like $365." Instead, if someone accuses you of using watered stock, you might want to look into getting a lawyer. The accusation means they think you've issued shares at a much higher price than could be justified by the firm's underlying assets, using trickery and underhanded tactics.