IPO University


When a company is publicly traded, a distinction is made between the total number of shares outstanding and the number of shares in circulation, referred to as the float. The float consists of the company's shares held by the general public. For example, if a company offers 2 million shares to the public in an IPO and has 10 million shares outstanding, its float is 2 million shares, or 20%. Tech and biotech IPOs sometimes issue a low float (5-10%), and the limited supply of shares then props up the price (but can lead to highly volatile early trading).