Whats the difference between a companys outstanding shares and its “float”?
A. All the shares a company has issued are its “shares outstanding.” Company insiders may hold some, while the public owns the rest. Insider shares are usually held for a long time and are not traded too often, while shares in public hands trade more frequently. The shares owned by the public represent the “float.” Consider Holy Karaoke, Inc. (ticker: HYMNS), which has 50 million shares outstanding. If the CEO and other insiders own 40% of them, then the float is the remaining 60%, or 30 million shares. It’s good to pay attention to this number with smaller companies, as stocks with small floats (referred to as “thinly traded”) can be extra volatile. Any demand will send the stock price soaring, as supply is so limited, and vice versa. You can learn more about how the financial world works in our Fool’s School. Check out our highly regarded How-To Guides, too. They can help you learn to make sense of financial statements, among other things. To learn to more about brokerages and possib
