Public float

Public float is the number (or market value) of a company's outstanding shares held by non-affiliates, meaning investors other than officers, directors and controlling shareholders. These are the shares that realistically trade in the open market. Float is always equal to or smaller than shares outstanding.

How it works

Public float = shares outstanding - shares held by affiliates (and, in many data sources, other restricted or locked-up shares)

Data providers calculate float differently, so the same stock can show different numbers. The SEC uses the market value of shares held by non-affiliates (the aggregate market value reported on the 10-K cover) for regulatory purposes:

• Filer status: public float of $700 million or more generally makes a company a large accelerated filer; $75 million to under $700 million an accelerated filer, which affects filing deadlines and auditor attestation requirements.
• Smaller reporting company: public float under $250 million qualifies (with a revenue-based alternative).
• Baby shelf rule: a company with public float under $75 million using a Form S-3 shelf can generally sell no more than one-third of its public float in any 12-month period.

Why it matters for traders

Float drives supply. A low-float stock can move violently on modest buying, which is why small-cap momentum traders screen for it. Short interest is usually quoted as a percentage of float, and high short interest on a small float is the classic setup for a short squeeze. Float can jump suddenly when a lock-up period expires or an offering closes, adding supply.

Example

Cobalt Ridge Mining (ticker CBRM) has 30 million shares outstanding. Insiders and a controlling holder own 18 million, so the float is 12 million shares. At $4 per share, the public float is worth $48 million, under $75 million, so CBRM's S-3 sales are capped at about $16 million in a 12-month period.

FAQ

What is a low-float stock?

There is no official cutoff, but traders often use the term for stocks with only a few million to roughly 20 million freely tradable shares.

Is float the same as shares outstanding?

No. Float excludes shares held by affiliates, so it is smaller.