No, it is wrong to assume that the instant price of the stock will probably fall down after the dilution. It might fall, but it might as well increase, which often is the case, since the company as a whole literally become more valuable (influx of new cash on the balance sheet for the issued shares) and it just gained significant extra working capital that it can use to expand operations.
In this case you rely on a functional rational market in ideal business operating conditions.
If I issue more stocks for a meme stock at the height of it's popularity it will likely go up in price for reasons completely disconnected from the balance sheets and future revenue.
Conversely, if I recently started the process for bankruptcy and issue more stocks to cover the liabilities on my balance sheet, the stock could very well decrease disproportionately to the number of issued stocks.
Stocks at the end of the day are based on the market's perception of the stock's worth. The market is not a single rational actor, rather numerous small irrational actors and a few very large highly rational actors. Obviously there is a spectrum in between, but the ratio of buyers on a given end of the spectrum will influence the behavior of a stock to either align or diverge from the fundamentals of the company, and not always in the way you would intuitively expect.
