Shares outstanding

Shares outstanding is the total number of a company's issued shares currently held by investors, including the public, institutions, officers and directors. It excludes treasury stock, meaning shares the company has repurchased and holds itself. Shares outstanding is the basis for market capitalization and earnings per share.

How it works

Several related share counts get confused:

• Authorized shares: the maximum the company may issue under its charter. Raising it requires a shareholder vote.
• Issued shares: shares ever issued, including those later repurchased into treasury.
• Outstanding shares: issued shares minus treasury shares.
• Public float: outstanding shares minus those held by affiliates such as officers, directors and large holders.
• Fully diluted shares: outstanding shares plus shares that could be created from options, warrants, RSUs and convertibles.

The count changes when a company issues stock (offerings, employee compensation, acquisitions, warrant exercises), repurchases stock, or does a stock split or reverse split. The latest figure appears on the cover page of each 10-Q and 10-K, as of a recent date. EPS uses the weighted average for the period instead.

Why it matters for traders

Changes in share count reveal dilution or accretion. A steadily rising count, common in cash-burning small-caps, means each share owns less of the company. A falling count from buybacks lifts EPS even when profits are flat. Watch the gap between outstanding and fully diluted shares: large overhangs of warrants or convertibles can cap a stock's upside. A request to increase authorized shares in a proxy often signals that more issuance is coming.

Example

Northwind Therapeutics (ticker NWTX) reported 40 million shares outstanding on its 10-K cover. It then sells 8 million shares in an offering and issues 1 million shares to employees, bringing the count to 49 million. A holder of 400,000 shares falls from 1.0% to about 0.82% of the company.

FAQ

Where can I find a company's shares outstanding?

On the cover page of its latest 10-Q or 10-K, which states the count as of a recent date.

Do shares outstanding include insider shares?

Yes. Insider holdings are part of shares outstanding but are excluded from the public float.