Weighted average number of shares

[viciam]

Hi all,

I'm reading through an annual report for Velti inc. It says the average number of shares outstanding are 55,865,000

I am trying to figure out how they got this number but it doesn't seem to add up.

My calculation is = ordinary shares at end of 31st Dec 2010(38,341,760) + ordinary shares at end of 31st Dec 2011 (61,790,985) / 2

But I am not getting 55,865,000. What am I doing wrong?

I got the numbers from 2011 and 2012 annual report http://investors.velti.com/annuals.cfm

Thanks in advance

 

[McLovin]

It's a weighted average. You'd need to find the dates the new shares were issued.

 

[viciam]

It's a weighted average. You'd need to find the dates the new shares were issued.

I found this in the annual report:

On January 28, 2011, we issue 12.5 million additional shares in our initial public offering in the United States and our listing on the NASDAQ
Global Select Market, for net proceeds of $134.1 million, resulting in a significant change in the percentage of our outstanding shares owned by
major shareholders. We issued a further 9,474,275 ordinary shares on June 14, 2011 in a follow on offering in the United States, for net proceeds
of $136.8 million.

 

[McLovin]

So the calculation would be something like:

38.342 * (27/365)+
50.842 * (137/365)+
60.316 * (201/365)=

55.865

 

[viciam]

So the calculation would be something like:

38.342 * (27/365)+
50.842 * (137/365)+
60.316 * (201/365)=

55.865

Hi,

Thanks for the reply.

I'm a little confused. What is 27, 137 and 201? What are 38.342, 50.842 and 60.316.

I thought the weighted average was simply shares outstanding at 31st Dec 2010 + shares outstanding at 31st Dec 2011 / 2

?

 

[McLovin]

Hi,

Thanks for the reply.

I'm a little confused. What is 27, 137 and 201? What are 38.342, 50.842 and 60.316.

I thought the weighted average was simply shares outstanding at 31st Dec 2010 + shares outstanding at 31st Dec 2011 / 2

?

27, 137 and 201 are fractions of the year. Hence 27/365 etc.

38/50/60 are shares on issue at points in time.

You need to calculate how many shares were on issue at each point during the year and weight them to how many days of the year that number of shares were on issue.

 

[viciam]

27, 137 and 201 are fractions of the year. Hence 27/365 etc.

38/50/60 are shares on issue at points in time.

You need to calculate how many shares were on issue at each point during the year and weight them to how many days of the year that number of shares were on issue.

So 38 was the shares outstanding at Dec 2010, then you added the 12.5 million shares in Jan 2011 to get 50m shares, how did you get 60?

Because the shares at end of Dec 2011 are 61,790 and not 60,316. Where did the extra 1,474 shares come from?

 

[McLovin]

So 38 was the shares outstanding at Dec 2010, then you added the 12.5 million shares in Jan 2011 to get 50m shares, how did you get 60?

Because the shares at end of Dec 2011 are 61,790 and not 60,316. Where did the extra 1,474 shares come from?

I took the opening balance and kept adding based on the data you provided in post #3. If there's a discrepancy then you'll need to figure out where and why. You get the general idea though for calculating weighted averages, right?

 

[viciam]

Yes I get the general idea,

many thanks