Why is a large amount of outstanding convertible bonds said to weigh on the share price?

When convertible bonds are converted into shares or the warrants of bonds with warrants are exercised, new shares are issued and existing shareholders' ownership ratios fall, which is called dilution.

Unconverted bonds that can already be converted may come onto the market as sell orders at any time and are often called an overhang (potential selling supply), and when refixing lowers the conversion price, the number of shares to be received rises and the dilution grows larger. This is also why KOFIA's best practice standards require managing underwriters of public offerings to check, as material on share price dilution risk, the issuance and exercise status of equity-linked bonds and stock options whose exercise periods have not yet ended.