Shares outstanding

The number of shares a company has issued and that are currently held by investors. The diluted figure adds shares that would exist if outstanding options and convertible instruments were exercised.

Example

A company reporting 196 million basic shares and 205 million diluted has 9 million of potential claims not yet issued.

Important

Use the diluted count for any per-share figure. The basic count flatters earnings per share by exactly the amount of dilution that is already contracted.

Related terms

• Dilution — The reduction in your percentage ownership of a company when it issues new shares to someone else.
• Earnings per share — Net profit divided by the number of shares outstanding - the portion of a company's profit attributable to each share.
• Market capitalisation — The last traded share price multiplied by the total number of shares outstanding - the market's headline figure for the value of a company's equity.
• Free float — The proportion of a company's shares actually available to trade, excluding stakes held by founders, governments, or long-term strategic holders.

Lessons that explain it

• A cap table is a list of who owns what, and it only ever gets longer — A capitalisation table records every share, option and convertible claim in a company. Ownership percentages depend on whether you count only issued shares or everything that could become shares. (9 min)
• What a share actually is: last in line, and why that is the point — A share of common stock is a residual claim - everything that is left after every other claimant has been paid. That single fact explains most of what equities do. (9 min)

All 578 terms in the Investing glossary