I'm going to take a shot at that question...i'm still a bit new, so if I miss the mark a bit then someone please help me out.
A/S Authorized Shares - this is the maximum amount of shares that can be issued by a company. It is set in the beginning and can't be raised except by a vote of the board(except in Nevada...You can find out the state of incorporation at pinksheets.com).
IMO, knowing the A/S is crucial because it can be an indicator of how much dilution is going to occur(like our wonderful VWKM that we found out through a TA slip that the A/S is 20 billion..no wonder they were hiding it)
O/S Outstanding Shares - this is the number of shares that have actually been issued. Some of the shares are free trading(available to you and I) but others cannot be traded(yet)due to restrictions.
IMO, another very crucial piece of the puzzle. Why? Because when the O/S and the A/S meet, we have a problem. I call it the "A/S wall". When the company has issued all they can then something has to give(assuming they need more capital than their revenues are generating). They need more cash but can't issue any more. At that point they must either raise the A/S or do a R/S(Reverse Split). Looks like this situation is what just occurred with RSHN. He told me he wasn't going to do a R/S anytime soon, but I knew something had to give since the A/S was 2 billion and the O/S was 1.8 billion and counting. The A/S is now 4 billion(do you think 2 billion new shares are for an acquisition or to sell on the open market? That is the question).
Restricted Shares - these are shares that have "restrictions" placed on them. These restrictions are basically stipulations on when they can be sold. I think usually it will be 1 or 2 years. These shares do not have an impact on the share price as long as they are restricted because they have been conceived but are not available for sell. By the way, that's one thing a transfer agent does.. A CEO can get on their TA's website and change a "restricted share" to a free trading share at the click of a button(as long as the board has approved it<ggg>) I think that one of the best questions to ask a CEO is what are the restrictions on the restricted shares? Check out this old board box header.
"125 Million O/S shares of which approx 100M shares are locked up until Jan/Feb 2005 at which time they start becoming free trading. The float of 25M shares is owned by the general public. Friendly shareholders control in the neighborhood of 15 million of these shares. Of the 100M shares in escrow , approx 80M shares are held by insiders. Please understand that AG Media Group - AMGJ, incorporated in the U.S., filed for a fresh listing. This was not a reverse takeover with pre-existing shareholders and skeletons."
investorshub.com
Since this info is often tough to confirm, most of the best DD mavens will just count all the restricted as free trading when trying to figure out a target price per share.
Float - these are the shares that are already on the market. This is the supply of a given stock. It's basically the O/S minus the restricted. This is what is going to determine the stock price. If the company reduces the float then the price would go up(buyback or retirement) if the float increases(through removing restrictions or offering more on the market) then price will fall.
Anyway, that's about all I have on the subject....and why I am making it point to place 99%(I will leave the 1% to the chance another HISC comes along) of all my future pinksheet dollars in a stock that I can watch the SS(share structure).
Any comments or corrections? TIA
GodBless-ND
cris |
