Gordon Scott has been an active investor and technical analyst of securities, futures, forex, và penny stocks for 20+ years. He is a thành viên of the bigbiglands.com Financial Đánh Giá Board & the co-author of Investing to lớn Win. Gordon is a Chartered Market Technician (CMT). He is also a thành viên of ASTD, ISPI, STC, & MTA.quý khách đang xem: Share outstanding là gì
What Are Shares Outstanding?
Shares outstanding refer khổng lồ a company"s stockcurrently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers & insiders. Outstanding shares are shown on a company’s balance sheet under the heading “Capital Stoông chồng.” 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 & may fluctuate wildly over time.
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Understanding Shares Outstanding
Any authorized shares that are held by or sold khổng lồ a corporation’s shareholders, exclusive of treasury stoông chồng which is held by the company itself, are known as outstanding shares. In other words, the number of shares outstanding represents the amount of stochồng on the open market, including shares held by institutional investors & restricted shares held by insiders và 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 stoông chồng options (ESO) or other financial instruments. Outstanding shares will decrease if the company buys baông xã its shares under a mô tả repurchase program.
Shares outstanding refer lớn a company"s stockcurrently held by all its shareholders, including nói qua blocks held by institutional investors & restricted shares owned by the company’s officers and 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 khổng lồ listing outstanding shares, or capital stock, on the company’s balance sheet, publicly traded companies are obligated to report the number of issued và outstanding shares and generally package this information within the investor relations sections of their websites, or on local stock exchange websites. In the United States, the figures for outstanding shares are accessible from the Securities và Exchange Commission (SEC)quarterly filings.
Stoông chồng Splits and Share Consolidation
The number of shares outstanding will increase if a company undertakes a stoông xã split, or will reduce if it undertakes a reverse stock split. Stock splits are usually undertaken to lớn bring the chia sẻ 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 chia sẻ consolidation khổng lồ bring its nói qua price inlớn the minimum range necessary 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 khổng lồ borrow shares for short sales.
As an example, the online đoạn phim streaming service Netflix, Inc. announcedomain authority seven-for-one stock split in năm ngoái. In an attempt to lớn increase the affordability of its stochồng and, concurrently, number of investors, Netflix increased its issuance of outstanding shares sevenfold, thus drastically reducing stock price.
Blue CPU Stocks
For a xanh chip stock, the increased number of shares outstanding due lớn 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 xã khổng lồ 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 và elevate overall earnings per chia sẻ, 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 lớn the Thủ đô New York Times, the “primary purpose will be lớn eliminate the shareholder dilution that will occur from future Apple employee equity grants & stoông xã purchase programs.” Due to lớn its enormous cash reserves, Apple has been able to repurchase its stock aggressively, thus decreasing shares outstanding increasing its earnings per nội dung.
As of December 2015, Apple’s market cap is $869.60 billion & it has 5.18 billion outstanding shares. The stoông chồng price is up nearly $170 since the buybaông xã program was announced.
Conversely, in May 2015, BlackBerry,Ltd. announced a plan lớn repurchase 12 million of its own outstanding shares in an effort to increase stochồng earnings. BlackBerry plans to buy baông xã 2.6% of its more than 500 million outstanding float shares as an increase in equity incentive sầu. Unlike Apple, whose excessive cash flow allows the company to lớn spkết thúc exorbitantly lớn 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 tóm tắt & because this number is so subject to lớn 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 khổng lồ perkhung a stock split, thus increasing the total amount of shares outstanding lớn 200,000. The company later reports earnings of $200,000. To calculate earnings per mô tả for the overall inclusive time period, the formula would be as follows:
But it remains unclear which of the two variant outstanding share values to 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 khổng lồ 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 lớn 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 nói qua.
Shares Outstanding vs. Floating Stochồng
Floating stockis a narrower way of analyzing a company’s stoông xã 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 và institutional investors. On a company balance sheet, they are indicated as capital stock.
What is the difference between shares outstanding & floating stock?
While shares outstanding tài khoản for company stoông xã that includes restricted shares and blocks of institutional shares, floating stoông xã specifically refers to shares that are available for trading. Floating stochồng 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, và therefore cannot be traded.
