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Finance Glossary

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Shares Outstanding

Definition:

The number of shares a company has that are outstanding. That's not like "outstanding" as in amazing, mind you.

Example

Company X has all hundred million shares outstanding in the stock moved from $12 a share in January to $34 a share by December. How much market capitalization or the value did it gain? Well, at $12 a share, the company was worth, according to Wall Street, $1.2 billion. By December, it was worth $3.4 billion for a gain of $2.2 billion. The shares outstanding did not change. It was only price appreciation, which added value to the company. The company could have acquired another company using only its stock. For example, it might have paid 50 million shares to buy company Y. It would then have 150 million shares outstanding. If the street liked the purchase and the stock traded up to $20 a share, then the new market capitalization would be $3 billion.

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