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Is there such a thing as "non-outstanding shares"? I ask because I'm trying to understand the relationship between market capitalization, outstanding shares, stock buybacks and ownership in a company.

So for example, I've been lead to believe that if a publically traded company ZZZ Inc. has 100M outstanding shares valued at $1 per share, then the company has a marketing capitalization of $100M. If I had $100M in cash and bought all 100M shares, does that mean I own 100% of ZZZ Inc. and can tell management what to do, start firing people, etc...? Or is there a concept of non-outstanding shares, where by maybe ZZZ Inc. still has a total of 200M shares, half of which are outstanding and another half that is non-outstanding. No one is allowed to buy the non-outstanding shares. And hence, my payment of $100M only gives me control of 50% of the company. Does the concept of non-outstanding shares exist or work in some way that prevent me from owning 100% of the company?

And depending on how the above question is answered, it made me wonder exactly what happens in a stock buyback situation. Let's say 100M shares are outstanding, traded in the open market, and reflect ALL shares of the company. When a company buys back 50M shares, do they convert them to "non-outstanding shares" to prevent anyone from ever buying it again? Hence, no one will ever be able to buy 100% of the company in the open market?

  • Surely 100M shares at $1 each would be a capitalization of $100M not $1B (and therefore cost $100M in cash to buy)? – TripeHound Feb 17 at 7:45
  • Just made the correction thanks for noticing – John Feb 17 at 9:47
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Shares outstanding are all the shares held by investors.

Treasury shares are held by the corporation.

Shares outstanding plus treasury shares equals the number of issued shares.

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  • But note that treasury shares can’t be voted, and so don’t affect control of the company. If you own all outstanding shares, you own the company. – Mike Scott Feb 16 at 17:44
  • So if ZZZ Inc. buys back all their shares except the one I hold, then it means ZZZ Inc. holds only Treasury shares and I hold the only outstanding share. Now no one can out vote me when I assign lunatics as board of directors to ZZZ inc.? – John Feb 17 at 1:10
  • Also, market capitalization is value of outstanding shares multiplied by number of outstanding share. If I'm the remaining holder of the final outstanding share , I get to say whatever the value of my share is? I can say the share is worth a few pennies even if the company has billions of assets that's twice it's liabilities? – John Feb 17 at 1:19
  • Not really. The problem is that you can not have a market capitalization because with all share s(regardless number) in the hand of private investors there is no market to start with. Most exchanges demand a float of x% of outstanding shares OR you take the company private, then there is no market at all. There are many companies that are not traded, – TomTom Feb 17 at 16:21
  • I followed up with this question: money.stackexchange.com/questions/120493/… – John Feb 17 at 17:48

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