Outstanding Shares
Quick Definition
The total number of shares of a company's stock currently held by all shareholders, including institutional investors, insiders, and the public.
Key Takeaways
- Outstanding shares are all issued shares held by investors, excluding treasury stock.
- They determine per-share metrics like EPS and book value.
- Share buybacks reduce outstanding shares; new issuances increase them.
What Is Outstanding Shares?
Outstanding shares represent the total number of a company's stock shares that have been issued and are currently held by all shareholders — institutional investors, mutual funds, insiders, and retail investors. This figure excludes treasury shares (shares the company has repurchased and holds in its own treasury). Outstanding shares are a critical metric because they determine key per-share calculations like earnings per share (EPS), book value per share, and dividends per share. The number of outstanding shares changes over time through new share issuances (secondary offerings, employee stock options) and share buybacks. Companies report both basic outstanding shares and diluted shares (which include potential shares from convertible bonds, options, and warrants). A declining share count through buybacks can boost EPS even without earnings growth, while excessive dilution through new issuances reduces existing shareholders' ownership percentage.
Outstanding Shares Example
- 1Apple reduced its outstanding shares from 26 billion to 15.4 billion through massive buyback programs over a decade.
- 2A company with 100 million outstanding shares and a $50 stock price has a market cap of $5 billion.
Related Terms
Issued Shares
The total number of shares a company has sold and distributed to shareholders, including treasury shares.
Authorized Shares
The maximum number of shares a company is legally permitted to issue, as specified in its corporate charter or articles of incorporation.
Float (Stock Float)
The number of shares available for public trading, excluding insider holdings, restricted shares, and closely held shares.
Market Capitalization
The total market value of a company's outstanding shares, calculated by multiplying the stock price by the number of shares outstanding.
Earnings Per Share (EPS)
A company's profit divided by its outstanding shares, showing how much money a company makes for each share of stock.
Stock
A security representing ownership in a corporation, entitling the holder to a share of profits and voting rights.
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