What does the term shares outstanding refer to?

The term "shares outstanding" refers to the total number of shares currently owned by shareholders. This includes shares held by institutional investors, retail investors, and company insiders but excludes treasury shares, which are shares that the company has repurchased and holds in its own treasury.

Shares outstanding is a crucial measure as it is utilized for calculating important financial metrics like earnings per share (EPS) and market capitalization. When investors look at a company's performance, they often consider how earnings are distributed among all shares outstanding to gauge the company's profitability on a per-share basis.

The other definitions provided do not accurately capture the meaning of shares outstanding. For instance, the total number of shares repurchased by the company refers to treasury shares, which do not count towards shares outstanding. Similarly, the total number of shares issued at the initial public offering represents only a part of the company's equity history and does not account for shares that may have been sold or repurchased afterward. Lastly, the total number of shares available to buy on the market does not necessarily reflect the shares owned by shareholders as it can change with market transactions.