Gordon Scott has been an active investor & technical analyst of securities, futures, forex, và penny stocks for 20+ years. He is a thành viên of the stamboom-boden.com Financial Đánh Giá Board and the co-author of Investing to Win. Gordon is a Chartered Market Technician (CMT). He is also a thành viên of ASTD, ISPI, STC, & MTA.Quý khách hàng vẫn xem: Share outstanding là gì
What Are Shares Outstanding?
Shares outstanding refer to a company"s stockcurrently held by all its shareholders, including chia sẻ blocks held by institutional investors & restricted shares owned by the company’s officers & insiders. Outstanding shares are shown on a company’s balance sheet under the heading “Capital Stock.” The number of outstanding shares is used in calculating key metrics such as a company’s market capitalization, as well as its earnings per giới thiệu (EPS)& cash flow per nói qua (CFPS). A company"s number of outstanding shares is not static and may fluctuate wildly over time.
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Understanding Shares Outstanding
Any authorized shares that are held by or sold lớn a corporation’s shareholders, exclusive of treasury stochồng which is held by the company itself, are known as outstanding shares. In other words, the number of shares outstanding represents the amount of stock on the open market, including shares held by institutional investors và restricted shares held by insiders and company officers.
A company’s outstanding shares can fluctuate for a number of reasons. The number will increase if the company issues additional shares. Companies typically issue shares when they raise capital through an equity financing, or upon exercising employee stock options (ESO) or other financial instruments. Outstanding shares will decrease if the company buys baông xã its shares under a nói qua repurchase program.Shares outstanding refer khổng lồ a company"s stockcurrently held by all its shareholders, including giới thiệu blocks held by institutional investors & restricted shares owned by the company’s officers & insiders.A company"s number of shares outstanding is not static & may fluctuate wildly over time.
How khổng lồ Locate the Number of Outstanding Shares
In addition lớn listing outstanding shares, or capital stock, on the company’s balance sheet, publicly traded companies are obligated to lớn report the number of issued và outstanding shares and generally package this information within the investor relations sections of their websites, or on local stoông xã exchange websites. In the United States, the figures for outstanding shares are accessible from the Securities and Exchange Commission (SEC)quarterly filings.
Stoông chồng Splits and Share Consolidation
The number of shares outstanding will increase if a company undertakes a stochồng split, or will reduce if it undertakes a reverse stoông xã split. Stoông xã splits are usually undertaken lớn bring the giới thiệu price of a company within the buying range of retail investors; the increase in the number of outstanding shares also improves liquidity. Conversely, a company will generally embark on a reverse split or nội dung consolidation to bring its mô tả price inkhổng lồ the minimum range necessary to lớn satisfy exchange listing requirements. While the lower number of outstanding shares may hamper liquidity, it could also deter short sellers since it will be more difficult to lớn borrow shares for short sales.
As an example, the online đoạn Clip streaming service Netflix, Inc. announceda seven-for-one stochồng split in năm ngoái. In an attempt lớn increase the affordability of its stock và, concurrently, number of investors, Netflix increased its issuance of outstanding shares sevenfold, thus drastically reducing stoông chồng price.
Blue CPU Stocks
For a blue chip stock, the increased number of shares outstanding due khổng lồ cốt truyện splits over a period of decades accounts for the steady increase in its market capitalization và concomitant growth in investor portfolios. Of course, merely increasing the number of outstanding shares is no guarantee of success; the company has khổng lồ deliver consistent earnings growth as well.
Share Repurchase Programs
Often times, if a company considers its stoông chồng to be undervalued, it will institute a repurchase program, buying baông xã shares of its own stoông chồng. In an effort lớn increase the market value of remaining shares & elevate overall earnings per share, the company may reduce the number of shares outstanding by repurchasing, or buying baông xã those shares, thus taking them off the open market.
Take, for example, Apple, Inc., whose outstanding securities have a large institutional ownership of about 62%. In March 2012, Apple announced a buyback program, several times since renewed, of upwards of $90 billion. According to the New York Times, the “primary purpose will be lớn eliminate the shareholder dilution that will occur from future Apple employee equity grants and stock purchase programs.” Due lớn its enormous cash reserves, Apple has been able khổng lồ repurchase its stock aggressively, thus decreasing shares outstanding increasing its earnings per mô tả.
As of December năm ngoái, Apple’s market cap is $869.60 billion & it has 5.18 billion outstanding shares. The stock price is up nearly $170 since the buyback program was announced.
Conversely, in May năm ngoái, BlackBerry,Ltd. announced a plan to repurchase 12 million of its own outstanding shares in an effort lớn increase stochồng earnings. BlackBerry plans to lớn buy back 2.6% of its more than 500 million outstanding float shares as an increase in equity incentive sầu. Unlượt thích Apple, whose excessive cash flow allows the company to spend exorbitantly to bring in future earnings, BlackBerry’s dwindling growth suggests that its repurchase of outstanding shares comes in preparation for its cancellation.
Weighted Average of Outstanding Shares
Since the number of outstanding shares is incorporated inkhổng lồ key calculations of financial metrics such as earnings per share and because this number is so subject to variation over time, the weighted average of outstanding shares is often used in its stead in certain formulae.
For example, say a company with 100,000 shares outstanding decides to perform a stochồng split, thus increasing the total amount of shares outstanding khổng lồ 200,000. The company later reports earnings of $200,000. To calculate earnings per cốt truyện for the overall inclusive time period, the formula would be as follows:
But it remains unclear which of the two variant outstanding giới thiệu values lớn incorporate inkhổng lồ the equation: 100,000 or 200,000. The former would result in an EPS of $1, while the latter would result in an EPS of $2. In order to account for this inevitable variation, financial calculations can more accurately employ the weighted average of outstanding shares, which is figured as follows:
In the above example, if the reporting periods were each half of a year, the resulting weighted average of outstanding shares would be equal khổng lồ 150,000. Thus, in revisiting the EPS calculation, $200,000 divided by the 150,000 weighted average of outstanding shares would equal $1.33 in earnings per cốt truyện.
Shares Outstanding vs. Floating Stoông xã
Floating stockis a narrower way of analyzing a company’s stochồng by shares. It excludes closely held shares, which are stoông chồng shares held by company insiders or controlling investors. These types of investors typically include officers, directors, & company foundations.
Frequently Asked Questions
What are shares outstanding?
Shares outstanding are the stochồng that is held by a company’s shareholders on the open market. Along with individual shareholders, this includes restricted shares that are held by a company’s officers & institutional investors. On a company balance sheet, they are indicated as capital stoông chồng.
What is the difference between shares outstanding and floating stock?
While shares outstanding tài khoản for company stoông chồng that includes restricted shares and blocks of institutional shares, floating stock specifically refers to lớn shares that are available for trading. Floating stock is calculated by taking outstanding shares and subtracting restricted shares. Restricted stoông chồng are shares that are owned by company insiders, employees & key shareholders that are under temporary restriction, & therefore cannot be traded.