When float is much less than total number of shares outstanding, it suggests that insiders – officers and employees – own a large percentage of the stock. This is usually a good sign because you know that the insiders believe in the company and their interests lie with yours, for the stock price to go up. On the other hand, heavy insider selling can drive a stock price down, at least temporarily. When float is virtually identical to shares outstanding, you know you don’t have to fear insider selling – they have already sold. On the other hand, if insiders no longer own the stock, they don’t have the same interests as you, caring more about how much money they can get out of the company than what they can do to boost the stock price.
