No. of Recommendations: 15
check out what happens to the stock price when a, baby blue chip, does a filing.
That is the issuance of new shares, which changes the count and the value of all shares, a very different question from what we were discussing. That's not merely a change in the number of shares in the public float (as for example you would get via the registration of pre-existing founders' shares)
In many countries, once a company "goes public" all the fungible shares of that pari-passu class may be sold on an exchange, barring any restriction contract prohibiting it. But in the US, each share or group of shares within a class is registered separately. Each S1 (each registration of a block of shares, which may entail a lockup waiting period) increases the public float but does not change the number of shares outstanding nor, by extension, the intrinsic value of any share outstanding.
I assume that all of Mr Buffett's shares are registered and unrestricted and technically part of the public float, but since he doesn't generally sell many they might reasonably be considered outside the public float for practical purposes.
If a firm sells $20m in new shares, the value of all the shares is probably changed. More cash per share, lower fraction of the business owned per share, the two probably not precisely balancing in fair value.
If a firm puts $20m of existing shares into the public float that were sitting in someone's drawer, none of the shares changes in value. They just sit in a different drawer.
Jim
