Share
One indivisible unit of ownership in a company. Your ownership percentage equals your shares divided by total shares outstanding.
A share is the smallest fungible unit of a company's stock. When a corporation is formed it divides its ownership into a fixed number of shares; every shareholder holds a proportional claim on the company's earnings and assets.
Share counts are not permanent. Stock splits multiply the count while dividing the price, and buybacks retire shares, increasing the ownership percentage of those that remain.
Shares traded on a public exchange differ from restricted shares (issued to founders or employees under lock-up) and treasury shares (bought back but not yet cancelled).
Example
A company has 10 million shares outstanding and you own 50,000. That is a 0.5% stake. If the company earns $2 million and distributes it all as dividends, your portion is $10,000.
Related Terms
Common Stock
The standard class of share that gives holders voting rights and variable dividends. Most publicly traded shares are common stock.
BeginnerEquity
Ownership value in an asset after all debts are subtracted. In markets, "equity" usually means stocks.
BeginnerFloat
The number of shares freely available for public trading, excluding insider-held and restricted shares.
IntermediatePreferred Stock
A hybrid share class with fixed dividends and liquidation priority over common stockholders, but usually no voting rights.
IntermediateShare Buyback
When a company uses its cash to purchase its own shares on the open market, reducing shares outstanding and boosting EPS.
IntermediateShares Outstanding
The total number of a company's shares currently held by all shareholders, including insiders and institutions.
BeginnerStock
A unit of ownership in a company. Buy stock and you own a slice of the business, with rights to a share of earnings and assets.
BeginnerStock Split
When a company divides each existing share into multiple new shares, lowering the price per share while total value stays the same.
Beginner