Monday, June 11, 2012

Stock Shares Aren't Equal

"Stock Shares Aren't Equal"," There are several different types of shares out there.
 Before you can make an informed investment decision, you need to know the terms that define shares.
 The number of shares can only be increased through a vote by the shareholders.

Some companies will retain shares to use later.
 You may see a company release treasury shares onto the market in order to bring in money for a project, expansion or research.
 Restricted stockowners will need the permission of the SEC to sell their shares.
 No matter how established the company is, all insiders must file with the SEC before they sell their restricted stock.
 Anyone can purchase these shares.

For example, if company authorizes 100 shares.
 There are 10 restricted shares of the company.
 The outstanding share amount is 80 (10+70=80).
 There are many companies that retain a large percentage of the authorized shares in treasury shares and in restricted shares.
 They can also issue this stock in the future as a way to raise funds.
 The stock will go up, become overpriced and then fall quickly in many cases.
 You can visit insider trading sites that let you know the planned or recent sales by insiders and major stockholders.

By understanding the various types of shares, you will have a better insight to the company itself.
 Make sure you know where the control lies in a company.
 By understanding shares you find that you are prepared to analyze companies.

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