FREE FLOAT | |||||||||
Definition | |||||||||
The free float of a listed security is the proportion of shares available for purchase in the market by investors. It is that part of shares not held by strategic shareholders and not held as treasury stock. | |||||||||
Calculation rule | |||||||||
Displayed as percentage of outstanding shares, and multiplied by the share price for easy comparability with the market cap. | |||||||||
Comment | |||||||||
Those with strategic ties to the company are least likely to sell their stock, thus the free float indicates the company's liquidity. | |||||||||
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