Public float
Encyclopedia
The float of a company whose stock is publicly traded has different default meanings depending on the presumed context.
Without a qualifier it may refer to the entire market capitalization
of the company or only its publicly traded equity.
Public float or the unqualified term may also refer to the number of outstanding shares
in the hands of public investors as opposed to company officers, directors, or controlling-interest investors. Assuming the insider held shares are not traded, these shares are the publicly traded ones. The float is calculated by subtracting restricted shares from outstanding shares. For example, a company may have ten million outstanding shares, but only seven million are trading on the stock market. Therefore, this company's float would be seven million. Stocks with smaller floats tend to be more volatile than those with larger floats. Large holdings of founding shareholders, corporate cross-holdings and holdings of the Government in partially privatized companies are usually excluded while computing this sense of "public float".
Without a qualifier it may refer to the entire market capitalization
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
of the company or only its publicly traded equity.
Public float or the unqualified term may also refer to the number of outstanding shares
Share (finance)
A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...
in the hands of public investors as opposed to company officers, directors, or controlling-interest investors. Assuming the insider held shares are not traded, these shares are the publicly traded ones. The float is calculated by subtracting restricted shares from outstanding shares. For example, a company may have ten million outstanding shares, but only seven million are trading on the stock market. Therefore, this company's float would be seven million. Stocks with smaller floats tend to be more volatile than those with larger floats. Large holdings of founding shareholders, corporate cross-holdings and holdings of the Government in partially privatized companies are usually excluded while computing this sense of "public float".
See also
- Concentrated stockConcentrated stockConcentrated stock is an equity making up a substantial part of the investor's portfolio. The major risk associated with such a portfolio is a lack of diversification; concentrated stock makes a large portion of the investor's wealth dependent on the performance of one particular stock...
- Market capitalizationMarket capitalizationMarket capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
- Open marketOpen marketThe term open market is used generally to refer to a situation close to free trade and in a more specific technical sense to interbank trade in securities.-Use of the term in economic theory:...
- Restricted stockRestricted stockRestricted stock, also known as letter stock or restricted securities, refers to stock of a company that is not fully transferable until certain conditions have been met. Upon satisfaction of those conditions, the stock becomes transferable by the person holding the award.One type of restricted...
- Shares authorizedShares authorizedShares authorized is the maximum number of shares that a company can issue. This number is specified in the company's articles of association but can be changed by shareholders' approval...
- Shares outstandingShares outstandingShares outstanding are common shares that have been authorized, issued, and purchased by investors. They have voting rights and represent ownership in the corporation by the person or institution that holds the shares. They should be distinguished from treasury shares, which is common stock held by...
- Treasury stockTreasury stockA treasury stock or reacquired stock is stock which is bought back by the issuing company, reducing the amount of outstanding stock on the open market ....