Assumed Fully Diluted Shares

Assumed Diluted Shares Outstanding

Definition

Assumed Diluted Shares Outstanding is the total number of company shares that would exist if all potential dilutive securities were converted or settled into common stock. Specifically, it equals the company’s Basic Shares Outstanding plus all additional shares from:

The assumed conversion of all outstanding convertible notes and convertible preferred stock

The exercise of all outstanding stock options

The settlement of all outstanding restricted stock units (RSUs) and performance stock units (PSUs)

This measure is not calculated using the treasury stock method and does not reflect equity award vesting conditions, stock option exercise prices, or contractual restrictions on the convertibility of debt.

Formula

Assumed Diluted Shares Outstanding = Basic Shares + Shares from Convertibles + Shares from Options + Shares from RSUs/PSUs

In Context

Basic Shares Outstanding = shares currently issued and held by investors.

Assumed Diluted Shares Outstanding = the maximum possible number of shares if all eligible securities converted, exercised, or settled, without regard to vesting or contractual limitations.

Example

Suppose a bitcoin treasury company has:

10 million Basic Shares Outstanding

1 million stock options held by employees

500,000 restricted and performance stock units

1.5 million shares issuable upon conversion of outstanding convertible notes

Assumed Diluted Shares Outstanding = 13 million shares