Shares Outstanding

What is it? The shares of stock that are owned by investors. The number of shares outstanding is used in earnings-per-share calculations. That number can be diluted in several ways, which can cause EPS and the stock price to fall. The company can issue more stock up to the amount that the board of directors has authorized. Holders of options and warrants also can exercise their shares. A company can reduce the number of shares outstanding by buying back shares. Such an event often causes the stock price to rise because there are fewer shares to buy. A buyback also signals that a company?s management thinks the stock is a good investment.

Added By: Savannah

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