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Microcap & Penny Stocks : 1ST MIRACLE GROUP (MVEE), founders last co. went $0.20-$46
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To: Banditjrjr who wrote (2034)1/14/1999 11:52:00 PM
From: Wait And See  Read Replies (1) of 5541
 
This is what I think I know

Shares outstanding = shares actually issued. some of these may be held by insiders ("restricted shares") which cannot be sold until a specified time has passed from when the holders got them. I would expect as their term of restriction approaches it might create some downward force as the market anticipates the relative dilution of more shares in float. But not as bad as real dilution (increase in shares outstanding).

Shares in float = outstanding shares that are unrestricted and can be traded.
These are held by us or by the MM's or whoever buys them including insiders. This is a key number for investors especially the fast trading variety (Jane there?) since it has the most short term bearing on supply and demand if and when the stock gets hot and lots of people want to buy. The smaller the float the bigger the potential for large sudden favorable price change.

There is another number to keep in mind and that is ....

Shares authorized = the maximum number of shares the company's bylaws permit to be issued. Frequently this number is MUCH larger than shares outstanding and can be a latent threat of instant dilution if the company does not have integrity (like certain BB frauds which are primarily in the issuing stock business). This is the upper bound on shares outstanding.

Dilution = when the number of shares outstanding increases without a corresponding increase in the worth the company. Usually results in instant drop in price everything else being equal. The same thing can occur when the restricted shares become unrestricted but to a lesser degree since the insiders of a healthy company do not want to drive down their own net worth with massive selling. However, if the company is less solid or not so healthy ....
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