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RyGuy

03/19/19 10:43 PM

#2907 RE: buyandhomework #2858

Alot of things going on there in that question.

I didn't see a response to you yet, so I thought I would answer.

Authroized Shares - are the quantity of shares that are determined when a company is formed and incorporated in the state where they have filed their articles of incorporations. Authorized shares are the maximum number of shares that could be issued at that time. To raise this number, a company would have to file an ammendment with the Secretary of State of the State where their company is incorporated.

Issued Shares - are the total number of shares that have been sold to investors, issued to employees, and any that have been repurchased and held in a company's treasury that they could potentially resell again, without raising the issued quantity.

Outstanding Shares - are the shares that have been sold by the company to investors or issued to employees that have not been repurchased by the company.

Example.... new XYZ company has been formed and filed their Articles of Incorporation in the State of Delaware, and they have authorized 100,000,000 shares. They IPO and provide 20,000,000 shares to Investment Bankers to raise capital. The founder of the company is issued and retains 21,000,000 shares. Say JP Morgan, Deutsche Bank, and BlackRock all acquire 2,000,000 shares or 5% stakes in the company, and the company buys back 2,000,000 shares in the first year.

It would look like this.

100,000,000 Authorized
41,000,000 Issued
39,000,000 Outstanding - the 2,000,000 shares company repurchased
12,000,000 Float - The amount minus 21 Million Insider, and minus 6 million banks purchased, and minus 2 million in the company treasury. This is what can trade daily without filings to be made. Any 5% owner and higher I believe would have to file form 4's shortly after buying or selling any additional equity.

There are other variables, but that is the gist of it.