| If you are considering investing in the stock | | | | Authorized shares – this is the number of |
| market it pays to learn the differences between | | | | shares the company first started off with. It |
| the various types of shares you can buy. If you | | | | should be noted that this won’t necessarily be |
| assume all shares are the same you might end up | | | | the same as the number of shares available to be |
| buying something you don’t really want. | | | | bought. For example a company may agree |
| Let’s take a look at the different types of | | | | initially to release one million shares. But it could |
| shares that are available. | | | | be that only nine hundred thousand of those |
| Float shares – these are the most popular | | | | shares will be available to be bought, either in |
| types of shares you will come across. The float | | | | restricted or float shares. |
| is basically the amount of shares that are ready | | | | Unissued shares – the name tells us what |
| to be bought by the general public. They are the | | | | these shares are. Let’s think about the |
| shares which are in use and available. Think of | | | | above example again, and the company which |
| the float in a cash till and you will see that the | | | | created a million shares to begin with. We have |
| same idea applies here. | | | | already seen that the company has issued nine |
| Restricted shares – as the name suggests, | | | | hundred thousand shares in the form of float and |
| these shares have restrictions placed on them. | | | | restricted shares. The remaining one hundred |
| This doesn’t mean they cannot be bought, | | | | thousand shares would be kept back and |
| but the Securities and Exchange Commission | | | | regarded as unissued shares – simply because |
| must give their approval to such a purchase | | | | they were not issued in the first place. |
| before it can take place. | | | | As you can see, although the different types of |
| Outstanding shares – these shares are what | | | | stock shares look complex to begin with, they are |
| the company has released for purchase. So the | | | | really all quite easy to understand. And there is |
| above two types of shares – the float shares | | | | no doubt that understanding what all the different |
| and the restricted shares – can both be added | | | | types of shares mean will help you enormously |
| together to form the number of outstanding | | | | when it comes to investing in them for the future. |
| shares which are available. | | | | |