I think the concept is this.If there is only 500 sheets of plywood in Florida right before a storm hits the price will go up. Because there will be many people that want some of that plywood.
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WIDGET COMPANY I OWN 10 shares WDGT
If the AS is 1,000 shares. (Authorized by Inc. documents.)
The OS is 800 shares. (actually issued)
The Float is 500 shares. (owned by those that trade in the public market)
News Flash WDGT just found the cure for cancer.
There are only 500 shares available in for the public to buy (the float) of which 10 are mine.
There is a great demand, small supply, the price goes up. I sell at a good prifit.
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WDGT 2nd example
AS 1,000,000,000
OS 800,000,000
Float 500,000,000
I own 10 shares.
GOOD NEWS
SAME DEMAND as in the other example.
BUT SUPPLY is MUCH greater, price will not move as fast.
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Maybe poor examples but I hope it helps.
PAUL
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But godliness with contentment is great gain.
For we brought nothing into this world, and it is certain we can carry nothing out.