When stocks are first issued, outstanding shares and issued shares are the same thing. When a company buys back shares of its own stock, however, those shares become treasury shares. Also, earnings per share is calculated by dividing the total outstanding shares by company earnings. Market capitalization and earnings per share are the two of the most significant investor metrics used to determine a company's current market value and overall performance.
Restricted shares include those given to company officers as part of their salaries or as part of a benefit package. The total number of outstanding shares can change for a number of reasons. Three of the most common reasons for the fluctuation of outstanding share totals are stock splits, share repurchase programs, and the exercise of stock options and warrants.
In a stock split , the number of outstanding shares doubles in a two-for-one split , resulting in a halving of the stock price.
Stock splits are often used to help bring improved liquidity to the company. Often, a company does this to meet listing requirements, which often require a minimum share price. New York Times. Financial Ratios. Fundamental Analysis. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data.
We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. What Are Shares Outstanding? Key Takeaways Shares outstanding refer to a company's stock currently held by all its shareholders.
A company's number of shares outstanding is not static and may fluctuate wildly over time. What are shares outstanding? What is the difference between shares outstanding and floating stock? How do stock splits impact shares outstanding? Article Sources. Investopedia requires writers to use primary sources to support their work.
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Shares outstanding do not include the stock in the treasury that have been repurchased by the company, but instead only the ones that shareholders currently own.
As the company sells off new shares and then buys some back, the shares outstanding fluctuates, making it a great indicator for the current health of the business. For example, the shares outstanding of a company might increase if they decide to sell more shares to the public, while it would be expected to decrease in the event of the reverse. Companies are required to provide regular financial reports to their investors, which will include the shares outstanding.
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