Public float
Posted: 28 March 2014 02:28 PM   [ Ignore ]
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Joost and everyone here,

Do any of you know how to calculate the public float? I am trying to decide which company is the accelerated filer, and which one is not. The rule for this is the public float is > 75 million or not. My idea is just year end stock price * shares outstanding. I wish to confirm with the forum that I am doing something make sense.

thank you all,
Zenghui

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Posted: 29 March 2014 02:43 PM   [ Ignore ]   [ # 1 ]
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hi Zenghui,

Market capitalization is not the best proxy for public float. I have seen a working paper on firms ‘gaming’ the float such that is stays below the cut-offs. For a paper I doublechecked 1,000-2,000 or so companies where the market cap exceeded the cutoff. Many of these had a float below the cutoff (the 10-K has a checkbox about filer status, but this info at the time was not available). Currently, this info is in Audit Analytics: http://wrds-web.wharton.upenn.edu/wrds/tools/variable.cfm?library_id=1&file_id=52036

Other than that, I remember that the new XBRL reporting has a field for public float.

best regards,

Joost

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Posted: 30 March 2014 07:47 AM   [ Ignore ]   [ # 2 ]
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Joost,

Thanks a lot for the info about audit analytics.

what do you mean by XBRL? could you explain more?
http://en.wikipedia.org/wiki/XBRL

this links seems not agreeing with what you telling me.

I appreciate your kind help,
Zenghui

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Posted: 30 March 2014 08:04 AM   [ Ignore ]   [ # 3 ]
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Joost,

Can i assume that audit analytic file about acc-filer is a complete list?

In other words, if a company not on this list, is it reasonable to assume its public float is below 75 million $?

thanks a lot,
Zenghui

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Posted: 30 March 2014 08:27 AM   [ Ignore ]   [ # 4 ]
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hi Zenghui,

It looks like the wiki page on XBRL is very general. I looked up the ‘public float’ in the XBRL manual for SEC filings, here: https://www.sec.gov/info/edgar/edgarfm-vol2-v11.pdf
Pages 6-12, 6-13 (section 6.5.21) discuss public float. There is actually also a field ‘EntityFilerCategory’. There is little history though for XBRL filing companies.

With respect to the filer status on AA. It has 2 indicator variables (one for accelerated filer and one for large accelerated filer status). There are 2 issues. The first is losing obs because of no match with AA, the second is missing values for these variables. In that sense you can’t assume that no match or no value says anything about filer status.

best regards,

Joost

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Posted: 30 March 2014 10:07 AM   [ Ignore ]   [ # 5 ]
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Joost,

Thanks for the detailed info about AA filer status. It sounds like we can only study the non-missing data that we can match it with AA audit fees and compustat financial information. In other words, the part of data we have is clean. That is good to know.

As to XBRL, if i understand correctly, this is a language/tool managers could use to file their forms on SEC, correct?

Thanks for teaching me this about XBRL.

Best,
Zenghui

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Posted: 30 March 2014 10:10 AM   [ Ignore ]   [ # 6 ]
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hi Zenghui,

The benefit of XBRL over ‘regular’ reporting is that the ‘reader’ (investors) can extract the info they need in an automated way (no need to go through the text of the 10-K to ‘find’ info).

Yes, I would work with the data in AA for the filing status. If the number of observations is limited, it is always possible to look up the 10-K of the firms with missing filer status and collect it manually.

best regards,

Joost

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