Starting out
Shares outstanding
The total number of a company’s shares currently held by all its investors.
How it works
The figure changes over time. Issuing new shares to raise money or pay staff increases it; buying shares back reduces it. Because most per-share figures divide by this number, changes to it move earnings per share without the business itself changing.
Reported counts vary in a way that matters. Basic shares outstanding counts what exists today. Diluted counts what would exist if all the options and convertible instruments were exercised, which is the more conservative and usually the more honest figure.
Where it misleads people
Heavy share-based pay can offset a buyback entirely. A company can spend billions buying shares back and end the year with more shares outstanding than it started with.
Related terms
- DilutionThe reduction in your ownership share when a company issues new shares.
- Share buybackA company buying its own shares in the market, reducing the number in issue.
- Earnings per shareNet income divided by the number of shares — the profit attributable to each share you own.
- Market capitalisationWhat the market says a whole company is worth: the share price multiplied by the number of shares.
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Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.