FloatVerifyLearn: float & dilution
Plain-English guides to float, dilution and SEC filings on US small-caps. Every fact sourced and dated. Data, not advice.
ADS / ADR Ratio: The Float Trap Hiding in Foreign Small-Caps
An ADS (American Depositary Share) is a foreign company's stock made tradable on a US exchange through a depositary bank. One ADS can represent several ordinary shares. If the ratio is 1 ADS = 35 ordinary shares, a "70M share" float is really about 2M ADS, the actual tradable unit.
ATM Offering Explained: How It Dilutes a Stock
An at-the-market (ATM) offering lets a public company sell new shares straight into the open market at prevailing prices, over time. For small-caps it's the most common form of dilution: shares get issued a bit at a time, the count climbs, and selling pressure keeps building. It lives in SEC filings.
Authorized vs Outstanding vs Float Shares Explained
Three numbers, three meanings. Authorized is the ceiling a company is allowed to issue. Outstanding is what it has actually issued. Float is the slice of outstanding that trades freely. The gap between authorized and outstanding is room to print more stock.
Baby Shelf Rule (I.B.6): The 1/3 Float Limit
Form S-3, General Instruction I.B.6, is the baby shelf rule. If a company's public float sits under $75 million, it can sell no more than one-third of that float through a shelf over any rolling 12-month stretch, putting a ceiling on shelf dilution.
Cash Runway & Stock Dilution: Read the Warning
Take a company's cash balance and divide it by its quarterly cash burn. That's runway: roughly how many quarters the business can keep going before the money runs out. Short runway, often under two or three quarters, and a dilutive raise gets much more likely. Both numbers sit in the 10-Q.
Convertible Note Dilution: Fixed vs Floating Explained
A convertible note is debt that turns into stock instead of getting paid back in cash. Fixed notes convert at a set price. Floating ("toxic") notes convert at a discount to the recent market price, so a falling stock forces more shares for the same debt.
Dilution Price Action: Why Spikes Fade All Day
Dilution price action is what happens when new share supply leans on price. Every share issued is one more somebody can sell. Companies dump that supply into strength and high volume, so the spike stalls and bleeds all day with zero bad news.
Dilution Terms Glossary: Float & Share Terms
Plain-English definitions for the dilution and float terms that actually move small caps: float, shares outstanding, authorized shares, ATM, shelf, S-1, 424B5, warrant, convertible, PIPE, ELOC, baby shelf, cash runway, short interest and restricted shares. A sentence or two each.
Equity Line of Credit Stock (ELOC), Explained
An ELOC is a committed purchase agreement. One investor promises to buy up to a set dollar amount of a company's stock whenever the company asks, at a price tied to the market with a discount. Picture an ATM offering, except it runs through a single counterparty.
Float & Dilution FAQ: Questions Traders Ask
Float is the shares you can actually trade. Dilution is a company printing more of them, so your slice gets thinner. Both numbers sit in SEC filings: 10-Q, 10-K, 8-K, 424B5, S-1, S-3. A tight float can rip in seconds; a fresh raise can slam the door just as fast.
How to Find Real Float (Step-by-Step Guide)
Start with shares outstanding from the cover page of the latest SEC filing. Subtract insider and restricted holdings from the DEF 14A, SC 13D/G, and Form 4. Then add back anything issued in a recent 424B5 or S-1 raise. What's left is what actually trades. That's your float.
How to Read SEC Filings (10-K, 10-Q, 8-K, S-1)
Start on EDGAR, the SEC's free database. The 10-K gives you the annual picture, the 10-Q the latest quarter, and the 8-K anything material that just happened. Shares outstanding sit on the cover page. Full-text search drops you straight onto the numbers.
PIPE Deal Stock: What a Private Placement Means
A PIPE is when a public company sells shares or convertibles straight to a few private investors, usually cheap and often with warrants. Those shares get registered for resale later via an S-1 or S-3, so dilution shows up on a delay. The deal is disclosed in an 8-K.
Registered Direct Offering, Explained (RDO)
A registered direct offering (RDO) is a negotiated sale of already-registered shares, usually pulled off a shelf, to one or a few investors. The price is often discounted with no broad public marketing. It lands as a block of dilution, right away.
Reverse Split Dilution: What Really Happens
A reverse split like 1-for-10 cuts the share count to lift the price, usually to keep a Nasdaq or NYSE listing above $1. By itself it's not dilution. What it does is reopen a big gap between authorized and outstanding shares, which a new dilutive offering tends to fill right after.
S-1 Filing Stock: What a Registration Means
An S-1 is the registration statement a company files with the SEC to register securities: either an IPO, or letting existing holders resell shares from a PIPE, convertible or warrant deal. Once a resale S-1 goes effective, those shares trade freely and float climbs.
SEC Filing Types Cheat Sheet (Dilution)
This cheat sheet ties each EDGAR form to what it tells you about a small-cap's float and dilution. Registrations like S-1 and S-3 authorize new shares. A 424B5 prices the actual sale. 8-Ks flag events fast. The 10-Q and 10-K report the share count.
Share Dilution Explained for Small-Cap Traders
Dilution is a company printing new shares. The total count goes up, so each share you hold becomes a smaller piece of the same business. Most small-caps fund themselves this way, and that fresh supply sits on the price and caps rallies.
Shelf Offering (Form S-3), Explained
A shelf offering is an SEC registration, usually Form S-3, that lets a company register securities now and sell them any time over the next three years. Filing it doesn't dilute anyone on day one. Watch the capacity, not just the filing date.
Short Squeeze Characteristics, Explained | FloatVerify
Short squeeze characteristics are the factors traders tie to a squeeze: a low float, high short interest, high days-to-cover, expensive or hard-to-borrow shares, and a catalyst that forces buying. None of them ensure a squeeze. They describe conditions, not outcomes.
Small Cap Gap Dilution Risk: Read the Structure First
A small-cap gap is a fast move off a catalyst, usually a PR or an 8-K, on a low share float with heavy volume behind it. Dilution risk is the company's ability to sell stock into that strength through an ATM or a shelf. Read the structure first.
Spot Dilution Early: Read the Filings First
You spot dilution early by reading a small-cap's filings for capacity before anyone uses it: an active S-3 shelf, an ATM program, warrants and convertibles outstanding, a thin cash runway, a bump in authorized shares. The paperwork shows what a company can do before the share count moves.
Stock Warrants & Dilution, Explained
A stock warrant is a right to buy newly issued shares at a fixed strike before it expires. Exercise it and the company prints new shares to fill the order. Share count goes up. Everyone who already owned the stock now owns a thinner slice. That bump in the count is the dilution.
What Is Stock Float? A Small-Cap Trader's Guide
Float is the pile of shares the public can actually buy and sell: shares outstanding minus what insiders, employees, and big long-term holders hold. When it's small, ordinary volume can throw the price around hard. It comes from a filing, so treat it as a snapshot.
Why Float Numbers Differ Across Sources
Most of the time, two float numbers disagree because they come from filings dated on different days. Add estimates versus reported counts, shares issued between filings, and different handling of restricted stock, and both numbers can be right at once.