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Total number of shares a company has issued to all shareholders.
Why It Matters
Outstanding shares is the total pie - every share the company has issued, whether held by the public, insiders, or institutions. It's used to calculate market cap and EPS. When companies do buybacks, outstanding shares decrease, increasing EPS even if profits stay flat. When companies issue new shares, outstanding shares increase, diluting existing shareholders.
Key Points
- Buybacks reduce outstanding shares - good for EPS and existing shareholders
- Stock issuance (like employee stock options) increases outstanding shares - dilutes existing holders
- Basic vs Diluted shares: Diluted includes options and convertible securities that could become shares
Related Terms
Common Questions
Total number of shares a company has issued to all shareholders. Outstanding shares is the total pie - every share the company has issued, whether held by the public, insiders, or institutions. It's used to calculate market cap and EPS.
Outstanding shares is the total pie - every share the company has issued, whether held by the public, insiders, or institutions. It's used to calculate market cap and EPS. When companies do buybacks, outstanding shares decrease, increasing EPS even if profits stay flat. When companies issue new shares, outstanding shares increase, diluting existing shareholders.
Buybacks reduce outstanding shares - good for EPS and existing shareholders
Stock issuance (like employee stock options) increases outstanding shares - dilutes existing holders
Basic vs Diluted shares: Diluted includes options and convertible securities that could become shares