What do the outstanding shares have to do with a stock?
Investors hear terms like outstanding shares, authorized shares and “the float” quite often. Knowing the amount of outstanding shares helps investors determine a company’s market capitalization.Authorized and RestrictedAuthorized shares are the maximum number a company can issue. Some of these are restricted shares and normally given to company insiders. Restricted shares are traded by special permission from the Securities and Exchange Commission.The FloatThe float is the number of shares available to the general public. The float volume fluctuates based on stock buyback, option and warrant activity.Outstanding SharesThe sum of restricted shares plus shares in the float are called outstanding shares. Shares kept in the company treasury are not included in the calculation. Since float volume fluctuates the number of outstanding shares fluctuates as well.In PracticeXYZ Corp. has authorized the issuance of 1,000 shares. Fifty shares are issued to company insiders, 750 issued to the gener
