1: shares outstanding definition
2: how shares outstanding works
3: shares outstanding vs issued
Shares
4: example of shares outstanding
Opening information:
Shares outstanding statement breaks into two words shares and outstanding, shares means pieces of one whole object.
Outstanding means some item or matter is available on the outside of something. Shares outstanding means pieces of something which are available for all the persons.
this article occupied the information about what is a share outstanding, how shares outstanding works in the stock market for corporate business, and what is the difference between the shares outstanding and issued shares, finally about one example for the shares outstanding.
1: shares outstanding definition
Where Mattan oil is a big publicly trading company which produce oil for the billions of people’s all around the world.
The mattan had a great reputation among the Investors. Because it’s made huge profits over long term.
Before the mattan oil went public, they needed great amount of capital to raise the business over globally.
So they registered with security and exchange of commission(SEC) to sell the ownership of the business.
SEC allowed the mattan oil company to authorized of maximum of 14 million shares.
In total authorized shares from SEC, the mattan oil issued the 8 millions shares to the general public, by selling this total issued shares of 8 millions to raise the beginning money.
Since After the two years of gotten public, the IPO of mattan industry, they re-bought the 2 millions shares.
So their is only 6 millions shares are available to the public Investors to exchange among themselves of mattan oil industry.
Obviously no matter what, here the available shares for the public Investors are considered as outstanding shares. When the issued shares are repurchased, the remaining shares are only consider as a outstanding shares or shares outstanding.
So now let’s have a look how the outstanding shares works in the stock market for all corporate Companies.
2: how shares outstanding works
Each and every corporate company before it’s went publicly traded industries to issue Shares, must had to do the underwriting with investment bank.
Moreover they had to register and approved by the SEC based on their minimum requirements.
Once it’s done, all the industry are allowed to issue shares to public stock Investor to bought and sold the shares of the business.
Shares which are issued from the company and available to the any public Investors is know as outstanding shares.
Because it’s not a just shares of the business, but it’s a ownership anyway. Any of the shares which outside the business, shares which are available to the general public are became as outstanding shares.
The outstanding shares might got increase without splitting a shares when the specific industry issue more shares for availability for stock Investors.
Any shares which are not given a voting rights on the annual meeting of the company are not consider as a common outstanding shares, because any normal outstanding shares produce ordinary rights to any stock holders.
But when they are not had a voting rights, the particular Investors didn’t hold the common outstanding shares, instead they bought any other shares of the industry such as preferred shares and differentiate voting shares extra..
So there are lots of types in shares, not all issued shares consider as a outstanding shares of the company.
But with a different look, every types of shares had outstanding shares, in Corporations common shares are normally consider as a outstanding shares.
The issued shares of common shares which means ordinary shares that available to public are only consider as outstanding shares.
Most of the people’s confused the issued and outstanding shares of the corporate business, so let’s jump into the key difference in it.
3: shares outstanding vs issued Shares
The difference between the issued shares and outstanding shares, outstanding shares would able to became as a non outstanding shares of the company.
But issued shares are not became as a non issued shares of the certain industry. Because once the shares are issued and available to the Investors , it’s could be any types of shares but it’s couldn’t became non-issued, so it’s called as issued shares.
On the other hand outstanding shares are shares which are currently available and exchange among the stock Investor each and every day in the stock market.
When particular business re-purchased the outstanding shares of the business, they became as treasury stock of the business, which means non-outstanding shares of the company.
To make more clear about the outstanding shares, let’s dive and jump into one example below.
4: example of shares outstanding
Say the company X had 100 millions issued shares and 80 millions as outstanding shares.
Now among the 80 millions outstanding shares, 5 millions shares are repurchased by the own business industry to keep as a treasury stock.
Now the people’s who hold 75 millions outstanding shares, which became the real owners of the company and all the money which are held by the business are only own by them.
It’s doesn’t matter how much shares are being non shares of outstanding shares, the outstanding shares own whole and real company.
Market rule: #100735
Outstanding shares is came in the market rules because outstanding shares which highly influence the investors valuation. Without outstanding share that market value are impossible to created.
But any decisions you take based on the valuation using the outstanding shares which are completely in your responsibility, so you never couldn’t raise the complaint.
If your investors and not comfortable or align investing with based on market rules please learn about how to regulate your investments under your control with use of Rule investing.