Rawnoc, that was a great post, and directly to the heart of the matter!! Let's review share structure. What is 'Share Structure'?
-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 hot the stock might get.
What are 'Outstanding Shares'?
-Outstanding shares are the total number of shares issued by the company, including free trading and 'restricted' stock.
What shares consist of the 'Float'?
-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.
How does the size of the 'Float' affect a stock?
To understand the mechanics behind share structure, let us consider the effect of the float size. The current float of a stock is the number one factor that determines how a stock will react to buying and selling pressure. 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. This is exactly what we have here with MPIX!!! The A/D line shows 350 million shares accumulated and the float is a little over 400 million. In essence there are not that many shares available to exchange on the open market.
AI
