Issued stock definition
/What is Issued Stock?
Issued stock is the shares of a company that have been distributed to investors. These are all of the shares representing the total ownership interest in a business. Issued stock includes shares that have been sold, given to employees or third parties as compensation or payment (respectively), donated, or issued in settlement of a debt - in short, every possible share that has been distributed. This includes shares held both by corporate outsiders and insiders. The amount of issued stock may be reported in a company's financial statements.
If a company reacquires stock and retires it, these shares are no longer considered to be issued.
Examples of Issued Stock
Here are several examples of issued stock:
Sold to investors during an IPO. When a company goes public, it issues shares to investors through an initial public offering (IPO). These shares are purchased by the public and become part of the company's issued stock.
Granted to employees as stock options. A tech startup might issue stock to employees as part of a compensation package. These shares are considered issued once the options are exercised and shares are officially distributed to the employees.
Used to settle a debt. A company may issue stock to a vendor instead of paying in cash for services rendered. Once the shares are transferred, they are part of the company’s total issued stock.
Donated to a nonprofit. A corporation may issue shares to a charitable organization as a donation. These shares, once granted, count toward the total issued stock of the company.
Issued Stock vs. Authorized Stock
Issued stock varies from authorized stock, in that authorized stock has only been approved for issuance by the board of directors, while issued stock has actually been distributed. In rare cases, the amount of issued stock will exactly match the amount of authorized stock; when this happens, the board of directors should request that shareholders approve an increase in the amount of authorized stock. Doing so gives the organization room to issue more stock via acquisitions, stock sales, stock option conversions, and so forth.
Terms Similar to Issued Stock
Issued stock is also called issued shares.