Outstanding Shares Overview & Where to Find Them
In the US, public companies are obligated to report their number of shares outstanding as part of the SEC’s filing requirements. Therefore, the total number of shares outstanding of Apple Inc. at the end of the year 2016 is 5,336.16 million. Therefore, the total number of shares outstanding of Walmart Inc. at the end of the year 2016 is 3,162 million. Therefore, the total number of shares outstanding for KLX Inc. at the end of the year 2018 is 3.8 million.
Among investors, it is most relevant to those who compile a position in a stock over a long period of time, buying on the dips and holding the shares. It includes shares held by the general public and restricted shares that are owned by company officers and insiders. Here’s what you need to know about the different share counts that publicly traded companies use, as well as how you can calculate the number of outstanding common shares.
What are Shares Outstanding?
A company’s number of outstanding shares is not static and may fluctuate wildly over time. The number of shares of common stock outstanding is a metric that tells us how many shares of a company are currently owned by investors. This can often be found in a company’s financial statements, but is not always readily available — rather, you may see terms like “issued shares” and “treasury shares” instead. Besides, it can be helpful to understand where the numbers you’re looking at came from. Alternatively, the total number of shares outstanding can be easily calculated as a company’s market capitalization divided by the current share price.
- If there is a difference between the number of shares issued and outstanding, the difference is treasury stock.
- Basic weighted average shares, on the other hand, represents the above-mentioned weighted average shares outstanding less the dilution of stock options for a specific period.
- Shares outstanding are used to determine a company’s market capitalization, i.e. the total value of a company’s equity, or equity value.
- Outstanding shares differ from treasury shares, which are the shares held by the company itself and which cannot be sold in the open market.
Typically, a stock split occurs when a company is aiming to reduce the price of its shares. When this takes place, a company’s outstanding shares how to calculate shares outstanding increase, and a higher degree of liquidity results. By contrast, a reverse stock split occurs when a company seeks to elevate its share price.
Market capitalization is calculated by multiplying the company’s share price by its shares outstanding. The number of outstanding shares changes periodically as the company issues new shares or repurchases existing shares, splits its stock or reverse-splits it. Shares outstanding and weighted average shares are both numbers that can help an investor understand how well a company performs over time. The buyback increases the market value of the existing shares in the open market. It also raises the company’s earnings per share figure (EPS) since earnings are divided by a smaller number of shares. A share repurchase generates a higher income per share, making each share more valuable.
- In other words, the formula takes the number of shares outstanding during each month weighted by the number of months that those shares were outstanding.
- An increase in the number of shares outstanding boosts liquidity but increases dilution.
- In other words, a company has issued shares and then bought some of the shares back, leaving a reduced number of shares that is currently outstanding.
- Here’s what you need to know about the different share counts that publicly traded companies use, as well as how you can calculate the number of outstanding common shares.
- Please don’t confuse shares outstanding with authorized stock and issued stock as they are completely different, and shares outstanding is a subset of both authorized stock and issued stock.
- Calculating the weighted average number of shares resolves the problem by taking into account the length of time that the changed number was in effect.
Before their availability on the secondary market, shares are authorized, issued, and, finally, purchased by investors who became equity owners or shareholders of the issuing company. Shareholders of common stock typically possess the right to participate in annual shareholders meetings and contribute toward the election of the company’s board of directors. A company may announce a stock split to increase the affordability of its shares and grow the number of investors. For instance, a 2-for-1 stock split reduces the price of the stock by 50%, but also increases the number of shares outstanding by 2x. A company’s outstanding shares may change over time because of several reasons.
Thus, in revisiting the EPS calculation, $200,000 divided by the 150,000 weighted average of outstanding shares would equal $1.33 in earnings per share. Companies with big news that affects their number of shares outstanding, such as stock splits, announce the events in press releases that are reported by the business media. Dilution occurs when a company issues additional shares, reducing current investors’ proportional ownership in the company. Investors may choose to use weighted averages if they have compiled a position in a particular stock over a period. Given continuously changing stock prices, the investor will calculate a weighted average of the share price paid for the shares. Conversely, the outstanding number of shares will decrease if the company buys back some of its issued shares through a share repurchase program.