SAN DIEGO (TheStreet) -- Say what you will about Amazon (AMZN) the stock, but you can't take this away from the online retailer: At least it tells you, right up front -- in the third paragraph of its earnings releases -- what its true share count is.
From its most recent earnings report, Amazon says:
"Common shares outstanding plus shares underlying stock-based awards totaled 475 million on September 30, 2013, compared with 469 million one year ago."
The key phrase is "plus shares underlying stock-based awards." Spelling it out, like Amazon does, gives analysts and investors an easy way to calculate the company's true market value and (if the company is making money) fully diluted earnings (or loss) per share.
The difference between diluted and the "basic" share count, as it's called, is often not that great.
The difference is beyond startling, with some dilution well in the double-digits.
Consider, for example:
- Yelp's stated number of shares is 65.5 million. Add in stock awards, and total shares are 76.6 million. The difference: 17%.
- Zillow: 36.7 million shares; 5,600 stock awards; total, 45,800. Difference: 25%.
- Pandora: 184.6 million shares; 34,176 stock awards; total, 218,843. Difference: 19%.
- LinkedIn: 113,940 Class A Shares; 23,971 Class B shares, 5,967 stock awards; total, 137,911. Difference, 21%.
- Twitter: Good luck trying to decipher the exact number from its IPO prospectus, but the difference between the headline share count and the real share count is around 25%.
Here's the rub: You wouldn't know it from the market valuations used by analysts from the big Wall Street firms, because they tend to just use the basic share count.