Shares outstanding is just the amount of all the company’s stock that’s in the hands of its stockholders. By itself, it is not intrinsically good or bad. However, what is significant is the number of shares outstanding.
It can also imply a certain level of risk depending on the reasoning for issuing more shares. Knowing the number of shares outstanding, especially when compared to similar firms, can help you protect your investments.
Shares outstanding refers to the number of shares of common stock a company has issued to investors and company executives. The number is used to calculate many common financial metrics, such as earnings per share (EPS) and market capitalization.
Can Outstanding Shares Be Negative? Sometimes, a company will buy back the number of shares outstanding in order to increase the stock’s value and improve financial statements. … A company can only buy back the number of shares that are available. Therefore, shares outstanding can not be negative.
Not to be confused with authorized shares, outstanding shares refer to the number of stocks that a company has issued. This number represents all the shares that can be bought and sold by the public, as well as all the restricted shares that require special permission before being transacted.
A company’s outstanding shares can fluctuate for a number of reasons. The number will increase if the company issues additional shares. Companies typically issue shares when they raise capital through an equity financing, or upon exercising employee stock options (ESO) or other financial instruments.
Shares outstanding does not include shares held by the business, also called treasury stock. If the company later decides to sell the shares, the number of shares outstanding increases. If the firm institutes a buyback program, purchasing shares from investors, it can reduce the number of shares outstanding.
Companies don’t run out of stock because they only sell it once. A company only sells stock during an IPO (initial public offering). Before an IPO, a company will still have investors, but their company is private.
An issued share is simply a share that has been given to an investor, whereas outstanding shares refer to all the shares that have been issued by a company.
Shares outstanding can be defined as the number of shares held by shareholders (including insiders) assuming conversion of all convertible debt, securities, warrants and options.
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Compare TSLA With Other Stocks.
| Tesla Annual Shares Outstanding (Millions of Shares) | |
|---|---|
| 2019 | 887 |
| 2018 | 853 |
| 2017 | 830 |
| 2016 | 721 |
Companies do buybacks for various reasons, including company consolidation, equity value increase, and to look more financially attractive. The downside to buybacks is they are typically financed with debt, which can strain cash flow. Stock buybacks can have a mildly positive effect on the economy overall.
What is a good debt to equity ratio?
Generally, a good debt-to-equity ratio is around 1 to 1.5. However, the ideal debt-to-equity ratio will vary depending on the industry, as some industries use more debt financing than others.
The number of stocks outstanding is equal to the number of issued shares minus the number of shares held in the company’s treasury. It’s also equal to the float (shares available to the public and excludes any restricted shares, or shares held by company officers or insiders) plus any restricted shares.
Day traders will often buy and sell shares of the same company multiple times during the same trading session, thus increasing the trading volume so that it exceeds the number of outstanding shares. Short-term traders provide the market liquidity required to trade more shares than the actual shares outstanding.
A minimum of one share must be issued upon incorporating. Additionally, if you plan on having more than one shareholder, then you must issue at least one share per shareholder.
Share Statistics
| Avg Vol (3 month) 3 | 89.17M |
|---|---|
| Shares Outstanding 5 | 16.41B |
| Implied Shares Outstanding 6 | N/A |
| Float 8 | 16.39B |
| % Held by Insiders 1 | 0.07% |