Introduction: After a company becomes publicly traded by issuing shares, it is important to look further into the quantity and type of shares they have issued. The total number of shares that make up a company is reached by adding some different share types.

1) Restricted Shares

One type of share is known as a restricted stock, meaning that the share is owned by an insider and has a sale/trade restriction placed on it. Typically the restriction is that the insider must own the stock for a certain amount of time before selling it. In any case, the insider must notify the SEC anytime they sell restricted shares. This notification is made public. If investors see a lot of insider sales happening, they may lose confidence in the company and the stock.

2) The Float

The other type of shares are those owned by the public. In other words, those that are available to trade on the stock market. The total number of these shares is known as the float. The size of the float compared to the number of restricted shares varies from company to company. In general, it is the trading of float shares that causes day to day changes in share price.

3) Outstanding Shares

Combining the number of restricted shares with the float gives us the total number of shares that a company has. This amount is the outstanding shares.

Companies can increase the number of outstanding shares, by having a secondary offering, in which they sell additional shares in order to raise money. This causes dilution and can lower the value of a stock. However, companies typically can't and won't dilute to their hearts content. The amount of dilution that can occur is limited by the authorized shares - which is the maximum number of shares that a company can ever sell. This amount is determined when they first go public.

Definitions-

Authorized Shares: total amount of shares a company can issue (sell)

Dilution: lowering of a single shares value as a result of an increase in the number of outstanding shares.

Float: the total shares that are owned by non-insider investors and traded on the stock market.

Insider: an investor or employee that has access to private company information

Outstanding Shares: sum of the restricted shares and the float.

Restricted Shares: insider owned shares with sale restrictions on them.

SEC: Securities & Exchange Commission - the government body that regulates the stock market.

Secondary Offering: sale of additional shares (after the IPO).

Share Price: also known as price per share (pps). The current trading price of a single share (stock).

Wrap-up: Outstanding shares is the total number of shares that a company has. This is a combination of insider-owned restricted shares and the float, which is the shares that are owned by regular investors and traded on the stock market.

The outstanding shares can increase with a secondary offering, but is ultimately limited by the authorized shares.