Outstanding Shares refer to the total number of shares of a corporation’s stock that have been issued and are held by all shareholders, including insiders (like executive and company officers), employees, and institutional investors, as well as retail investors. These shares represent ownership in the company and may entitle the holder to dividends and voting rights.
If a company increases or reduces the number of its outstanding shares, it can impact important financial metrics like EPS (Earnings per Share) and PE (Price to Earnings) ratios, which investors often use to assess a company’s profitability and value. More outstanding shares can dilute earnings but may also lower stock prices, making them more accessible to investors. Conversely, fewer outstanding shares may lead to higher earnings per share and potentially higher stock prices.
It’s crucial to differentiate between outstanding shares and other types of shares like authorized shares, treasury shares, or floated shares. Any changes in the count of outstanding shares are typically disclosed through public securities filings.
