What are Common Shares?
” Common shares define the basic ownership of a company. Each share means that the owner of that share is entitled to vote on the affairs of the company and is entitled to share in the profits of the company (for as long as s/he is a shareholder). There is no limit to the number of common shares a company may issue. As companies grow, they generally issue more shares, e.g. to attract new investors. Craig Schelp asks if the number of outstanding shares affects share prices? (The CEO of Triant Technologies said there quite a few shares outstanding when asked.) Yes, slightly – because of supply and demand factors. Also, more shares means a lower price per share (given a constant market cap for the firm) making them more affordable which in turn could increase demand slightly. Craig also asks, “what is dilution?”. Whenever new shares are issued from the “treasury” of a company (i.e. when a company “prints” new shares), all existing shareholders are diluted. For example, if 10 million share
