The main difference between Float And Outstanding Shares is that outstanding shares refer to the total number of shares a company has issued, including restricted stock, while float represents shares available for public trading, excluding shares held by insiders, employees, or major shareholders.
Content ID:
- Float Shares Meaning
- Outstanding Shares Meaning
- Difference Between Shares Float And Outstanding
- Difference Between Shares Float And Outstanding – Quick Summary
- Floating Shares Vs Outstanding Shares- FAQs
Float Shares Meaning
Float shares refer to the number of a company’s shares available for public trading on the stock market. They exclude shares held by insiders, company officers, or major stakeholders. The float represents the portion of shares actually accessible for purchase and sale by general investors.
Float shares are the subset of a company’s total outstanding shares that are freely traded in the stock market by the general public. These shares exclude those held by company insiders, executives, and large institutional investors, as they are not usually traded frequently.
The size of a company’s float can significantly impact its stock’s volatility and liquidity. A larger float means more shares are available for trading, often leading to more stability in the stock price. A smaller float can result in higher price volatility due to limited supply.
For example: If a company has 1 million total shares and insiders own 3,00,000, the float would be 7,00,000 shares. These are the shares available for public trading, impacting the stock’s liquidity and price volatility.
Outstanding Shares Meaning
Outstanding shares represent the total number of a company’s shares that have been issued and are held by shareholders. This includes shares owned by institutional investors, company officers, and the public. Outstanding shares are used in calculating market capitalization and various financial metrics.
Outstanding shares are the total shares a company has issued to shareholders, encompassing all ownership stakes. This figure includes every share bought by investors, shares owned by institutional entities, and restricted stocks held by company insiders and executives.
This number is fundamental in financial analysis as it’s used to compute a company’s market capitalization and earnings per share (EPS). Market capitalization is derived by multiplying the outstanding shares with the current stock price, while EPS divides profit by the number of outstanding shares.
For Example: If a company has issued a total of 1 million shares, and 3,00,000 shares are held by investors, including the public, institutional investors, and company insiders, then its outstanding shares total would be 1 million and float shares would be 7,00,000 shares.
Difference Between Shares Float And Outstanding
The main difference is that outstanding shares are all shares a company has issued, including those held by insiders and institutions. Float shares are just a portion of these, specifically the ones available for public trading on the stock market.
| Aspect | Outstanding Shares | Float Shares |
| Definition | Total number of shares issued by a company and held by all shareholders. | Number of shares available for public trading, excluding those held by insiders and major stakeholders. |
| Includes | Shares held by insiders, company executives, institutions, and public investors. | Only shares held by the general public and retail investors. |
| Purpose | Used to calculate market capitalization and other financial metrics. | Indicates the liquidity of the stock and potential market volatility. |
| Size | Typically larger than the float, as it encompasses all issued shares. | Generally smaller, as it excludes significant insider and institutional holdings. |
| Impact | Reflects the company’s total equity distribution and value. | Affects stock price movement and trading volume. |
To understand the topic and get more information, please read the related stock market articles below.
Difference Between Shares Float And Outstanding – Quick Summary
- Float shares are the portion of a company’s shares available for public trading, excluding those held by insiders and major stakeholders. They represent the accessible shares for general investors to buy and sell on the stock market.
- Outstanding shares are the total issued shares of a company held by all shareholders, including institutional investors, company officers, and the public. They’re essential for calculating market capitalization and other key financial metrics.
- The main distinction is that outstanding shares include all shares a company has issued, held by insiders, institutions, and the public. In contrast, float shares are those specifically available for public trading, excluding insider and institutional holdings.
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Floating Shares Vs Outstanding Shares- FAQs
The main difference is that outstanding shares encompass all shares a company has issued, including those held by insiders, while float shares refer only to those available for public trading, excluding insider and institutional holdings.
The main advantages of floating shares include increased market liquidity, allowing easier trading for investors, and enhanced price discovery due to the broader participation of the public in buying and selling the company’s shares.
An example of a floating stock is when a company like Apple Inc. has a portion of its total shares actively traded by the public on the stock exchange, excluding those held by insiders and institutions.
The purpose of outstanding shares is to represent the total equity ownership in a company. They are used to calculate key financial metrics like market capitalization, earnings per share, and dividend distributions.
Having outstanding shares is essential for a publicly-traded company as they reflect equity ownership and are necessary for trading in the stock market. They enable capital raising, shareholder participation, and valuation of the company.
Yes, outstanding shares can be sold. They represent the total shares owned by all shareholders, including the public, and are actively traded on the stock market. This liquidity is crucial for market dynamics and valuation.
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