Outstanding Shares Meaning, Formula, Types, Where To Find?

And if the company that buys the shares for a deep discount turns around and sells them into the market, those also become part of the float. Penny stock companies usually create more shares and dilute shareholders through toxic financings. They sell millions of shares at a deep discount to raise capital for research, development, expansion, or — because I always think the worst of every company — to line insiders’ pockets. Outstanding shares include all held how to calculate outstanding shares by investors, while float excludes restricted shares. These are the shares a company has issued to investors, both publicly and privately. Another metric calculated using shares outstanding is the price-to-book (P/B) ratio.

Advanced dividend calculations

Assuming all option holders exercise, Company A would issue 10 million shares. With the $50 million in cash, in theory it could instantly repurchase 5 million shares at $10 each. This means the company has distributed USD 10 million in dividends during the year. This means every shareholder receives USD 5 in dividends for each share they own. Pay 20% upfront margin of the transaction value to trade in cash market segment.

Different Types of Share Counts

Let us understand the different types of outstanding shares equation through the explanation below. Outstanding shares are the shares in the hands of the public, executives and employees. They are the number of shares actually owned by the company’s shareholders. This means the company plans to distribute USD 4 million in dividends to its shareholders. Dividends declared represent the total amount a company has committed to paying its shareholders after a formal announcement.

How to Calculate Outstanding Shares

• For example, let’s say you want to calculate the weighted average number of outstanding shares for a company over two reporting periods of 6 months each.
• When high volume comes in due to a news catalyst or promotion, it can create massive moves and short squeezes.
• For a loss-making company, the diluted share count will reduce loss per share, since the net loss is being spread over a larger amount of shares.
• But the number of shares outstanding can be considered good or bad … The more shares a company has, the more the value of the company is spread out.
• Too many traders don’t have a trading education or prepare trading plans in advance.
• Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month.

That’s why offerings and dilution through toxic financing can have such a huge impact on a stock’s price. When the float becomes larger as these shares enter the market, each share becomes worth less. Then, once the stock goes full supernova, the insiders and promoters can sell their shares for a nice profit. That’s all at the expense of newbies who believe in the company and invest in it long term. Factors like stock buybacks or issuance of new shares can alter the number of outstanding shares. The number of shares outstanding of a company can be found in its quarterly or annual filings (10-Qs or retained earnings 10-Ks).

What are Issued Shares?

Then, add those terms together to get the weighted average number of outstanding shares. As we’ve already seen, the number of a company’s outstanding shares can vary over time, sometimes fluctuating a great deal. A company could issue new shares, buy back shares, retire existing shares, or even convert employee options into shares. Once you have collected the total number of preferred shares, common shares outstanding, and treasury shares, you’re ready to do your calculation.