posted
Hello, I'm very new to stocks and am having troubles understanding differences between Authorized shares, Outstanding shares, Float and dilution..
Can someone, anyone, explain in laymans terms but as detailed as possible what each is, significances of each, how they work together etc... I need lots of help and would appreciate as much info from lots of different people so I can get different perspectives to put it all together.
Greatly appreciate the help!!!! Tks
Posts: 4 | Registered: Mar 2005
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posted
AUTHORIZED SHARES / "A/S" The max number of shares that a corporation is legally permitted to issue, as specified in its articles of incorporation. This number can be changed only by a vote of all the shareholders. Management will typically keep the number of authorized shares higher than those actually issued. This allows the company to sell more shares if it needs to raise additional money.
OUTSTANDING SHARES / "O/S" Stock currently held by investors, including restricted shares owned by the company's officers and insiders as well as those held by the public. Shares that have been repurchased by the company are not considered outstanding stock. They are also known as "issued shares" or "issued and outstanding". This number is shown on company's' balance sheets under the heading "Capital Stock" and is more important than the authorized shares or float. It is used in the calculation of many widely used metrics including "market capitalization" and "Earnings-per-Share (EPS)".
FLOAT The total number of shares publicly owned and available for trading. The float is calculated by subtracting restricted shares from outstanding shares. For example, a company may have 10 million outstanding shares, but only 7 million are trading on the stock market. So, the float would be 7 million. Stocks with small floats, under 3 million shares, tend to be a lot more volatile than others.
DILUTION A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Adding to the number of shares outstanding reduces the value of holdings of existing shareholders.
So YOU MAY SEE:
2,000,000,000 Authorized or A/S 500,000,000 Outstanding or O/S 150,000,000 Float
This particular company can issue more shares or "Dilute" the stock up to the A/S - get it? Company raises funds, stockholders lose as PPS plunges, you sell your car and beat the dog.
The bigger the amount of shares out there to trade, the more it takes to move the pile. Low float or tight float stocks move quicker and are more volatile.
Check the threads here, see which stocks have moved up and check the numbers for shares. It will become quite apparent to you which ones are dilution pigs and which ones are worth your time and money.
posted
I was just thinking about this. Wouldnt a low float or a high float be a reletive number to the price of the stock and not an arbitrary number like 3,000,000. The reason I say this is because if I take a stock like google and if it had a float of 3,000,000 and it trades in the 380 area it would take billions of dollars going into it to move it and on the other hand a stock at .006 it would only take thousands of dollars to move it. So a stock for .08 that has a float of 3,000,000 and a stock at .0003 has a float of 500,000,000 the stock at .0003 actually would have greater volitility even though the float number is greater since it would take much less money going in to move the stock because if I multiple the float by the price the .0003 stock still takes far less money to move it. Maybe im wrong but that just seemed to make sence to me.
Posts: 205 | From: ca | Registered: Aug 2005
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posted
the higher the float the more difficult it is to move the price.. at least for me... perfect example is Qbid among others... yet the suckers still think Qbid will be $10 a share before the year ends (well this is what some of them said back in January lol ) .... but then again there was a stock recently that went from .05 to $90 in one day... was in the newspapers if you didnt read about it.. i forget the name of the company/stock now... was only this week the article came out in the paper... alot of lucky (i wouldnt call them smart) people are rich on that one... even though the Exchange halted trading on it...
-------------------- Let the world change you... And you can change the world.
Ernesto "Che" Guevara de la Serna Posts: 4669 | Registered: Mar 2004
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quote:Originally posted by metal1: a stock that went from .05 to 90 in one day?
Yup... read it in the NY Post among other papers ... trading was halted once it reached $90.... stock manipulation was mentioned i think... and also something about a 30 to 1 reverse split... anyways i should of saved the article and made a thread about it.. thought someone else would of beat me to it so i threw the paper out.. im positive the stock symbol started with the letter "C" though.. i'll ask my coworker if he can remember the stock... but it was in the papers within the last 7 days if anyone can remember the stock or the article..
-------------------- Let the world change you... And you can change the world.
Ernesto "Che" Guevara de la Serna Posts: 4669 | Registered: Mar 2004
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quote:Originally posted by Treemoney: I was just thinking about this. Wouldnt a low float or a high float be a reletive number to the price of the stock and not an arbitrary number like 3,000,000. The reason I say this is because if I take a stock like google and if it had a float of 3,000,000 and it trades in the 380 area it would take billions of dollars going into it to move it and on the other hand a stock at .006 it would only take thousands of dollars to move it. So a stock for .08 that has a float of 3,000,000 and a stock at .0003 has a float of 500,000,000 the stock at .0003 actually would have greater volitility even though the float number is greater since it would take much less money going in to move the stock because if I multiple the float by the price the .0003 stock still takes far less money to move it. Maybe im wrong but that just seemed to make sence to me.
OMG!! I must be stupid... I just can't understand what this means!! I'm sorry y'all, can someone please explain...
cmrn is the symbol. i don't see it like they see it on the yahoo chart though.
Yeah thats the one... but i just read your other link for the LA Times.. so wondering which one is the accurate one... anyways i would say they raised more then $192,000 + LoL .... anyways i dont know if this link will work.. but apparently it did go from around $5 to $90 in one day around or on Oct.31 ....
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and which ones are worth your time and money.
