Stock splits are usually undertaken to bring the share price of a company within the buying range of retail investors; the increase in the number of outstanding shares also improves liquidity.
Shares are beholden to the same economic laws as anything else that can be bought or sold: price is determined by supply and demand. Thus, the value of each share is inversely related to the number of shares outstanding, with all other things being equal.
Many experts suggest starting with 10,000, but companies can authorize as little as one share. While 10,000 may seem conservative, owners can file for more authorized stocks at a later time. Typically, business owners should choose a number that includes the stocks being issued and some for reservation.
Mike Price, MSF has ten years of experience value investing. Shares outstanding refers to the number of shares of common stock a company has issued to investors and company executives. The number is used to calculate many common financial metrics, such as earnings per share (EPS) and market capitalization.
What is a good stock float?
Investors typically consider a float of 10-20 million shares as a low float, but there are companies with floats below one million. Some larger corporations have very high floats in the billions, and you can find even lower-float stock trading on over-the-counter exchanges.
The number of shares you own doesn’t depend on the market; it’s an amount that you control. When you invest regularly, you will add shares to your share balance even as your account balance fluctuates.
In the stock market, when the number of shares available for trading increases as a result of management’s decision to issue new shares, the stock price will usually fall.
outstanding shares have several differences. An issued share is simply a share that has been given to an investor, whereas outstanding shares refer to all the shares that have been issued by a company.
A company’s float cannot be greater than its outstanding shares. Floating stock can increase if the company chooses to issue more shares of stock, but the number of outstanding shares would also increase in that case.
In stocks, a round lot is considered 100 shares or a larger number that can be evenly divided by 100. In bonds, a round lot is usually $100,000 worth. A round lot is sometimes referred to as a normal trading unit, and may be contrasted with an odd lot.
Shares outstanding refers to the total number of shares a company has issued, while the public float — also referred to as floating shares or “the float” — are shares that are publicly owned, unrestricted and available on the open market.
So, the answer is that available stock CAN run out. In lightly traded companies, you might not find anyone who wants to sell. I’ve had that happen on the other end, where I put in a market sell order and could not sell all of my shares.