How Many Shares Does a Company Have?

Contents

Table of Contents

The general question of how many shares a company has can’t be answered explicitly because it depends.  Since there is no restriction for the number of shares within a company, different types of companies can have varying numbers of existing shares: A start-up might only have a few shareholders, while multi-billion dollar companies will usually consist of millions or even billions of shares outstanding.

Deciding on how many shares a company should start with, is primarily based upon how the owners think about the future growth prospects of the company. Therefore, the number of shares is completely determined by the business and its owners and will usually change over the company’s life span.

As soon as you buy shares of stock on the stock market, you become a shareholder within the company by acquiring an ownership stake of the business. All publicly-traded companies have their equity split up into a great number of shares, whereas many of them are constantly switching owners throughout the day. 

Because there is no general answer for the number of shares of all existing companies, it would be useful to get a better picture of the number of shares that bigger companies usually consist of. 

How Many Shares Does a Company Usually Have?

Some public companies that are somestimes known as low float stocks such as FFD Financial Corp (FFDF) or Amcon Distributing Co (DIT) have less than 1 million shares outstanding. 

Major companies, on the other hand, usually consist of substantially more shares such as Apple (AAPL) with currently 17.1 billion shares outstanding, or Facebook (FB) with 2.4 billion outstanding shares. Companies oftentimes consider increasing their number of shares throughout time by splitting their stock in order to attract more investors.

Here is a list of some well-known companies and their number of shares:

CompanyMarket CapitalizationShares Outstanding
Apple Inc. (AAPL)$2.675T16.865B
Microsoft Corporation (MSFT)$2.537T7.567B
Amazon.com, Inc. (AMZN)$1.816T515M
Alphabet Inc. (GOOG)$1.944T722M
Meta Platforms, Inc. (FB)$948.747B2.859B
Berkshire Hathaway Inc. (BRK-B)$643.102B2.256B
GameStop Corp. (GME)$16.199B73M

Data as of November. 2021 Source: Yahoo Finance, Macrotrends

As already mentioned above, it is completely up to the business to decide the total amount of shares since the primary effects would only be the change in the value of each share and liquidity of the stock.

A great example of why a business might increase the number of shares would be Berkshire Hathaway led by Warren Buffett. Investors of Berkshire have the choice to invest in two different share classes which are categorized as class A and class B shares. With a stock price of over $300,000, Berkshire’s Class A stock is currently considered the most expensive stock in the world.

This is plainly due to the fact that since its inception, the company has never gone through a stock split, and neither will it likely in the future, as Buffett and his company agreed to rather exclusively offer the stock to more serious and long-term minded investors.

In order to make it possible for regular investors to invest in the company (without paying hundreds of thousands of dollars), Buffett decided to issue Berkshire Hathaway Class B shares, which trade for a fraction of the class A shares. This was only possible by splitting the existing shares into many additional shares, which resulted in the drastically decreased price tag for each share.

Why Do Companies Need to Issue Shares?

Nearly all known companies are publicly traded and available to most people to invest their money and consequently become a shareholder within the business. But why do companies even bother letting everyone become shareholders, and why do companies need to be split up into countless amounts of shares, instead of just relying on a few shares and owners?

One common characteristic among all types of businesses, whether being a startup or a trillion-dollar company is the fact that each business requires capital in order to grow. 

Good to know

  • Generally, companies have two main ways to finance their growth at the start of their business life cycle: either through debt financing or equity financing. Debt financing includes issuing bonds, or simply borrowing money from private or public sources such as banks and institutions.
    Just like the name implies, debt financing consequently means taking the obligation to pay back the debt including interest payments in the future.

  • Most companies and startups prefer to raise capital by selling parts of the company as equity to investors. This can either happen privately, for instance, when startup owners offer an equity stake to private people or through an IPO, which enables the business to offer their shares to the public for the first time. After an IPO, companies still have options to issue additional shares, such as by conducting a follow-on offering.

Instead of making the obligation to pay down debt, companies may rather just sell a fraction of the business in order to obtain the capital needed.

Can Companies Issue as Many Shares as They Want?

So where exactly is the limit? At which point does issuing shares have a negative impact on the business? The main problem with adding additional shares to the pie is that when a company gets split up into more and more shares, each existing share will automatically get diluted, meaning that the value of each share will decrease relative to the number of shares outstanding.

From a technical standpoint, issuing new shares won’t have a direct impact on the numbers of the business as a whole. The money that is raised from the share issue would increase the value of the company.

However, shareholders may suffer from dilution of their held shares, as the value on a per-share level might be reduced. What’s important is how the company will manage the money that has been raised.

Consequently, as an investor, it is very important to pay close attention to what a company actually does with the money that is being raised by additional shares issues. Most companies usually tend to give a clear explanation of why they choose to issue new shares and what they are planning to do with the raised capital.

The stock price of the company will usually go either up or down as a result of the company’s following action. Therefore, when the decisions from the management turn out to be good for the future of the business, investors shouldn’t immediately react with negativity and pessimism to additional share issues.

How to Find the Number of Shares Within a Company

There are relatively straightforward ways to find out how many shares a public company has outstanding. Here are two approaches that you can take:

  1. Calculating the number of shares outstanding. Since the market capitalization of a company is defined as the number of shares outstanding multiplied by the current stock price, we can reversely find out the number of shares by dividing the company’s market capitalization by the current stock price. 
  2. Looking up the number of shares on financial research sites. Nowadays, there are a variety of different financial sites that also provide the number of shares outstanding within a pubicly traded business along with tons of other financial information and data. A quick Google search including the company’s name and the word “shares outstanding” will typically lead to an appropriate source where you can find the number of shares within the given company. 

Conclusion

Especially at the beginning, businesses will require external financing sources in order to grow. A common way for business owners to raise capital is to offer equity ownership to investors in exchange for capital. To accomplish that, businesses need to issue additional shares.

Some companies might consist of many more shares than others, and the number of shares may always be changed throughout time.

The increase in the number of shares doesn’t necessarily affect the financials of the company negatively at first but will primarily influence the liquidity of the stock.

Share this article.

More to explore

Disclaimer

The information on this website is not intended as investment advice. Do not consider the information as individualized financial advice or advocation to buy and sell any finanical securities. 

Investing comes with inherit risks. Therefore, you should always consider seeking investment advice from a professional who is aware of your individual financial situation. You are responsible for your own investment research and decisions.

Keep in mind that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. We try our best to keep things fair and balanced, in order to help you make the best choice for you.

Join our Newsletter

Receive weekly insights around investing and the finance world.

We won't send you spam. You can unsubscribe at any time.