Shares outstanding
Shares outstanding is the number of a company's shares held by all its shareholders, insiders included: every share it has issued and not bought back. It is larger than the float, which leaves out the shares held by officers, directors and big affiliated holders, and it is the share count behind market cap.
Why it matters to a small-cap momentum trader
Float tells you how much stock can trade today. Shares outstanding tells you how big the company is, and the gap between the two tells you how much stock sits with insiders who could one day sell. A small cap with 50 million shares outstanding and a 5 million float trades thin, but nine shares in ten are held by people who are not trading them today.
The share count is also where dilution shows first. When it jumps from one filing to the next, the company has sold stock, converted notes or paid someone in shares.
The share counts, from biggest to smallest
Authorized shares. The most the company's charter allows it to issue. Raising it takes a shareholder vote, and a vote to raise it is often a sign more stock is coming.
Issued shares. Every share ever issued, including those the company has bought back and holds as treasury stock.
Shares outstanding. Issued minus treasury stock: the shares held by anyone outside the company, insiders included. Market cap = shares outstanding × price.
Float. Shares outstanding minus the shares held by insiders and affiliates, and often minus restricted shares. It is the part that can trade freely.
Companies report shares outstanding on the cover of every 10-K and 10-Q, as of a stated date. They also report public float on the 10-K cover, but as a dollar value held by non-affiliates, measured months earlier, not as a share count.
Shares outstanding in Hindsight Markets
The share count is the one the SEC filings had stated by the day you replay, carried across any split that had already happened. The Float column takes insider and affiliate holdings out where the company reports them; where it does not, the float shows the full share count, so the two numbers can match, and the real float is lower.
A worked example: from share count to float
An illustration with round numbers, not a real stock or a real day.
The cover page. A company reports 25 million shares outstanding. Insiders and affiliates hold 15 million of them.
Float. 25 million − 15 million = 10 million shares, 40% of the share count.
Market cap. At 3.00 a share, market cap = 25 million × 3.00 = 75 million dollars. The float alone is worth 10 million × 3.00 = 30 million dollars.
Next quarter. The cover shows 31 million shares. 31 − 25 = 6 million new shares, a 24% increase in the share count and, if all of them are free to trade, a 60% increase in the float.
Common mistakes small-cap traders make with shares outstanding
- Using shares outstanding as the float. It overstates the supply on a company with large insider holdings, and the stock trades thinner than you expect.
- Using float as the size of the company. Market cap is shares outstanding times price. A tiny float does not make a tiny company.
- Trusting an old cover page. The count is as of a date, often weeks before the filing. Offerings since then are not in it.
- Forgetting a split. A count dated before a reverse split is in the old shares. Divide it by the ratio.
Common questions
- What is the difference between shares outstanding and float?
- Shares outstanding counts every share held by anyone outside the company. Float takes out the shares held by insiders and affiliates, leaving the shares that can trade freely. Float is always the smaller number.
- What is the difference between shares outstanding and shares issued?
- Issued shares include stock the company has bought back and holds in treasury. Outstanding shares leave that treasury stock out, because nobody outside the company holds it.
- How do you calculate shares outstanding?
- Issued shares minus treasury shares. In practice you read it from the cover of the latest 10-K or 10-Q, then add any shares sold since, from 8-Ks and prospectus supplements.
- What is public float?
- The market value of the stock held by non-affiliates, which companies report on the cover of their 10-K, measured on the last business day of their second fiscal quarter. It is a dollar figure, and it decides limits such as the baby shelf rule.
- Do shares outstanding change?
- Yes. Offerings, warrant exercises, note conversions and stock pay add shares. Buybacks remove them. A reverse split divides the count by its ratio, and a forward split multiplies it.
How to practise it in Hindsight Markets
- Open a past trading day and run the Small Cap Low Float Top Gainers scan.
- Add the Shares out and Market cap columns beside the Float.
- Compare the two columns: a mover whose float is a small part of its share count trades thin today, with a lot of stock held back.
- Open its Filings window and compare the latest cover-page count with any offering since.
- Trade it, then check the journal to see how far it moved each way while you held it.
Practice this on a real past day in Hindsight Markets
Open a real trading day, put the share count beside the float on your scanner, and trade the stock whose supply is really small.