What does outstanding shares mean?

Posted by youngsequan on August 10, 2009 (08:00PM)

From what I understand outstanding shares is the number if shares that investors, insiders and institutional investor have at a specific time.

Is that correct, so that number changes every day?

Chess_king_and_pawns_thumb Brokerage Account

Posted by JJL on August 10, 2009 (08:25PM)

outstanding shares = the total amount of shares in a company.

Posted by OldFart on August 10, 2009 (09:39PM)

The number of outstanding shares is pretty stable, a public company needs to amend its articles of incorporation to issue additional shares. It happens but not very often and the existing shareholders are not happy bcz it dilutes their shares

Posted by Veneratio on August 10, 2009 (09:47PM)

OldFart said: The number of outstanding shares is pretty stable, a public company needs to amend its articles of incorporation to issue additional shares. It happens but not very often and the existing shareholders are not happy bcz it dilutes their shares

 Not quite...

Outstanding shares=authorized stock-issued stock-treasury stock

When a company files with the SEC to sell shares it receives x # of authorized shares. They issue only a fraction of these which then become "outstanding shares." When they issue new shares they are simply taking from their supply of authorized shares.

Shares that the company buys back are known as treasury stock. They can save these for a rainy day if they need to raise capital without wanting to further dilute shareholders or for a variety of other reasons.

Posted by OldFart on August 10, 2009 (10:14PM)

Ven, sorry but if we rework your equation by moving the treasury stock on the left

Outstanding shares + treasury stock = authorized stock - issued stock

the right side is just the "unused shares"

Outstanding shares + treasury stock = unused shares

which is clearly not right

Here is from wikipedia


Posted by Veneratio on August 10, 2009 (10:23PM)

Oops, that's what I meant. Thanks lol

Posted by incubus on August 10, 2009 (10:33PM)

The Old Fart hath speaketh.

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