lolo,
It is really fairly easy to understand.
Share Structure is a breakdown of the amount of, and types of stock the company has issued. The number of 'outstanding shares' (O/S) as well as the number of available shares on the market, the 'float', have the biggest effect on how a stock will trade, or in other words, how quickly it can trade. Lower O/S and floats trade much more quickly, as there are less shares to buy and the principle of supply and demand is at work.
Outstanding shares (O/S) are the total number of shares issued by the company, including free trading and 'restricted' stock.
The float consists of all the outstanding shares that are not restricted. Essentially meaning the shares that are available to exchange between traders/investors on the open market.
So if there are tons of shares available on the market, ordinary share holders and 'market makers' will be able to sell these while the price moves slowly and in small increments. If the float is low and buying pressure is high, the price will be forced up to levels where shares are available. So, the ideal stock is one with a relatively low number of outstanding shares, and a relatively low float.
There is a negative side of having too small of a float, though. Without many shares "floating" around, it may be difficult to purchase shares without 'chasing' the ask. The more money you are trying to put in, the harder it will be. On the other side, it will often be difficult to sell your shares once you have them, unless there are enough buyers, a big enough buyer to sell all of your shares to, or you are willing to sell your shares for a substantial discount from the current price. Because of this, low float stocks can be very volatile, moving huge percentages in a matter of minutes, or even seconds. These can be far too dangerous for beginners, and should be traded only after some solid trading experience.
AVTI is not a really low float, but it is low enough that you see great PPS (price per share) upside when buying pressure is applied, for instance on Thursday for about an hour (42% increase overall for the day).
A penny stock with a great O/S count is around 100-500 million, and a float ~50-90% of the O/S. This is going to vary depending on the price of the stock. Stocks with a higher Price Per Share (PPS) can be just as easy to trade having a lower O/S and vice-versa.
It is usually good to see that the company has some restricted stock issued, and a float lower than the O/S is indicative of this. Restricted shares are often times issued to others as payment for a service; ie - website development, consulting, legal services, etc. Beware that when they go un-restricted, usually after one year, the individual(s) may dump the shares at market to cash in. Restricted shares are also often held by company insiders. If management, including the CEO, are accepting restricted shares as compensation, you might infer that they have a vested interest in seeing their stock do well... If they keep holding them past the restriction period, this is an even better sign. Why else would they hold, unless they thought the PPS would go up?
In addition to the O/S and float, there is also the 'authorized share' count, or A/S. This is the currently authorized maximum amount of shares that can be issued into the market. This number reveals a very important thing; the number of shares that can be sold into the market by the company, which will dilute the value of the stocks, because the more shares, the less they are worth. For this reason, traders will often be reluctant to load up shares if the O/S is much lower than the A/S. The reason being is the less shares the company has left to sell, the lower the chance of destructive dilution. Be aware, however, that a pink sheet or OTC company can increase their A/S on short notice.
If the company's transfer agent, or TA is "gagged", you will have no way of knowing changes to the A/S, O/S, or float. If the stock isn't gagged, it may be prudent to contact the company and/or transfer agent on a regular basis to confirm there are no increases in the share structure.
AVTI's T/A is gagged, in that they have chosen a transfer agent that NEVER gives out the share structure. The name of that company is Continental. They tell you to call the company, who typically will also not give the share structure.
IMO with AVTI, we have an A/S of about 800 million shares, and an O/S of around 600 million. There is debate as to what the float is, but even if it would dilute to the 800 million A/S, that is really not bad for a pink stock.
Hope this helps.
AI
