The answer to your question has to do with the an explanation of "shares authorized, issued and outstanding." Companies, in their Articles of Incorporation, specify a maximum number of shares they are authorized to issue.
For example purposes let's assume Facebook is authorized to issue 100 shares.
Let's pretend they have actually issued 75 shares, but only 50 are outstanding (aka Float, i.e. freely trading stock in the market) and stock options total 25 shares.
So if someone owns 1 share, what percentage of Facebook do they own? You might think 1/100, or 1%; you might think 1/75, or 1.3%; or you might think 1/50, or 2%. 2% is the answer, but only on a NON-diluted basis.
So today someone who owns 1 share owns 2% of Facebook. Tomorrow Facebook announces they just issued 15 shares to Whatsapp to buy the company. Now there are 65 shares outstanding and 90 issued. Now someone who owns 1 share of Facebook own only 1/65, or 1.5% (down from 2%)!
- The answer to your question is it depends. If Whatsapp GROWS Facebook's business valuaiton in excess of the percent stock dilution existing shareholders experienced at the time of purchase (25% in our example), shareholders weren't actually "diluted" because their 1.5% is in aggregate more valuable then their previous 2% (would you rather own 1.5% of 1 billion or 2% of 1 thousand...)
- Should Facebook's valuation remain the same, in our example, shareholder's were diluted 25%
- Should Facebook's valuation decline shareholder's would be diluted in excess of 25%
"Valuation" can be thought of as the price of the stock at the time of the purchase announcement.