Watered stock is an asset with an artificially-inflated value.[1] The term most commonly refers to a form of securities fraud in which a company issues stock to someone before receiving at least the par value in payment.[2]
^McCormack, Alfred. 1931. "Review of Stock Watering: The Judicial Valuation of Property for Stock-Issue Purposes". The Yale Law Journal. 40, no. 8: 1344–1345.
^Dodd, David L. Stock Watering: The Judicial Valuation of Property for Stock-Issue Purposes. New York: Columbia University Press, 1930.