Explaing outstanding shares and floats...
To understand what a float is, we first need to explain what "shares outstanding" mean. "Shares outstanding" are the total number of shares that a publicly traded company has. These include shares owned by insiders and large institutions, plus "restricted" shares and the float.
The float represents the shares of the company that are "freely" tradable. Meaning, the shares other than those held by institutions or other owners totalling more than 5% of the company, restricted shares and insider holdings.
The smaller a float, the more volatile a stock can become. If a stock has one million shares in its float and announces really good news, the share price will soar due to their being hardly any shares in the float. If there are hardly any shares in the float, this means that shares are harder to buy and the price to buy shares will go up.
If a stock has a really big float, this would mean that the stock is prone to less explosive moves. A stock with a float of 100 million shares won't rise 100% in one day, but a stock with a float of 1 million shares could.
------------------------
Instead of me writing, I copied, cut some paragraphs and pastes what I wanted some of the investors to understand about the outstanding shares and float. Next time you invest, you will be a little more educated.
