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Strategies & Market Trends : Z Best Place to Talk Stocks

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To: DanZ who wrote (43539)9/19/2002 4:21:02 PM
From: rgood2002  Read Replies (2) of 53068
 
maybe this will clear things up:

invest-faq.com

"Data that are frequently reported about a stock are the number of shares outstanding and the float. These two bits of information are not the same thing, although they are closely related. In a nutshell, the outstanding shares are those held by the public (but possibly restricted from trading), and the float is the number of shares held by the public and available to be traded.

If that was not clear, let's begin at the beginning. When a company incorporates, the articles of incorporation state how many shares are authorized. For example, the company NotLosingMoney.com could incorporate and have 1,000,000 (one million) shares. This is the number of authorized shares. At the moment of incorporation, these shares are held in the company treasury (at least that's what people say); the number of outstanding shares and the float are both zero.

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When a company buys back its own shares on the open market and returns these shares to the company treasury, this reduces both the float and the number of outstanding shares. If a company has sufficient cash to purchase shares, in theory these purchases could eventually buy all the shares outstanding, which is essentially the same as taking the company private. "

pretty good site for definitions.
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