By itself, it is not intrinsically good or bad. However, what is significant is the number of shares outstanding. Shares outstanding are useful for calculating many widely used measures of a company, like its market capitalization and earnings per share.
The number of shares outstanding is also significant to know because a firm could choose to issue more stock if it has authorized more shares than it currently has outstanding. If the company decides to sell additional authorized shares, it can reduce the value of the existing shares.
The increase in capital for the company raised by selling additional shares of stock can finance additional company growth. … It is a good sign to investors and analysts if a company can issue a significant amount of additional stock without seeing a significant drop in share price.
The number of shares outstanding increases if a company sells more shares to the public, splits its stock, or employees redeem stock options. The number of shares outstanding decreases if the company buys back shares or a reverse stock split is completed.
A company’s outstanding shares can fluctuate for a number of reasons. The number will increase if the company issues additional shares. Companies typically issue shares when they raise capital through an equity financing, or upon exercising employee stock options (ESO) or other financial instruments.
Some shares are restricted, such as those awarded to executives. Outstanding shares that are not restricted comprise the company’s floating stock. … When a company issues too many additional shares too quickly, existing shareholders can be hurt. Ownership levels can be diluted and share prices can drop.
What is a good float for a stock?
Investors typically consider a float of 10-20 million shares as a low float, but there are companies with floats below one million. Some larger corporations have very high floats in the billions, and you can find even lower-float stock trading on over-the-counter exchanges.
What is a good market cap?
Sizing up stocks
Large-cap: Market value of $10 billion or more; generally mature, well-known companies within established industries. Midcap: Market value between $3 billion and $10 billion; typically established companies within industries experiencing or expected to experience rapid growth.
Tesla Inc. designs, develops, manufactures, and sells electric vehicles and stationary energy storage products. It operates primarily in the United States, China, Norway and internationally.
Compare TSLA With Other Stocks.
|Tesla Annual Shares Outstanding (Millions of Shares)|
When companies issue additional shares, it increases the number of common stock being traded in the stock market. For existing investors, too many shares being issued can lead to share dilution. Share dilution occurs because the additional shares reduce the value of the existing shares for investors.
In the stock market, when the number of shares available for trading increases as a result of management’s decision to issue new shares, the stock price will usually fall.
Companies don’t run out of stock because they only sell it once. A company only sells stock during an IPO (initial public offering). Before an IPO, a company will still have investors, but their company is private.
The number of outstanding shares, however, can never be more than the number of issued shares. After a company has bought back investor’s stocks, the shares that have been purchased will not be considered outstanding shares, although they are still issued shares. … In some cases, a company will own stock in itself.
A minimum of one share must be issued upon incorporating. Additionally, if you plan on having more than one shareholder, then you must issue at least one share per shareholder.
Thus, for most investors the number of stocks in their portfolio should ideally between 15 to 25, depending on the investment strategy.