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Market cap = shares outstanding * share price. Reducing shares increases the price (while keeping market cap the same). Share splits increases the shares outst
by JDDunn9 11y ago
Market cap = shares outstanding * share price.
Reducing shares increases the price (while keeping market cap the same). Share splits increases the shares outstanding and decreases the price. So... yes, shares outstanding does matter.
- phyalow 11y agoNow you are confusing outstanding shares with market float. Shares repurchased become treasury stock and are now apart of equity.
- JDDunn9 11y agoWhether the company destroys the shares or retains them as treasury stock is irrelevant. Investors don't care if their share price went up by 10%, or if they effectively have 1.10 shares.