Unissued Stock - Definition
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Table of ContentsUnissued Stock DefinitionA Little More on What is Unissued StockUnissued Stock and Treasury SharesAcademic Research
Unissued Stock Definition
An Unissued stock refers to stock owned by a company but have not been issued or offered for sale in the market. Unissued stock is a class of stock that has been authorized for use in the charter of a company but are yet to be issued. Unissued stocks do not accumulate dividends, neither are they useful for casting votes during shareholders election.
A Little More on What is Unissued Stock
Unissued Stock should not be confused with treasury stock. Treasury stock refers to a class of shares that had been issued by a company but repurchased by the same company. Unissued stocks on the other hand, are stocks that have not been issued or offered for sale. The availability of unissued stock afford a company flexibly if stocks are needed to be sold or issued in the future. Also, for shareholders, despite that unissued stock yield no dividend and cannot be used in casting vote, it offers dilution in the value of shares of a company chooses to issue the stocks in future.
Unissued Stock and Treasury Shares
Unissued shares are different from treasury shares which were shares sold and repurchased by the company. Regardless that treasury shares and unissued shares are not the same, some companies classify repurchased shares as unissued shares. Shares that have been authorized for use in a company's charter but are yet to be issued are unissued shares. In 2014, Family Dollar Stores filed a 10k with SEC where they stated that Shares purchased under the share repurchase authorizations are generally held in treasury or are canceled and returned to the status of authorized but unissued shares. Hence, to calculate the number of unissued stock, the total number of authorized for issuance is deducted from the total amount of shares outstanding, and treasury stock shares.
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