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The Effect of Corporate Insiders

The amount of shares available on the open market, the “free float”, is sometimes less than the total number of shares because a portion of the outstanding shares may be held by “insiders,” and/or by the company
as treasury stock. In addition to the float being perhaps much smaller than the total number of shares, a significant portion of the float may be owned by large institutional investors who rarely trade. As a result, on any given trading day, generally only a small percentage of shares are traded.

9.85% of Yahoo! shares shares are held by corporate insiders; 1,245,100,000 are held by the public, where
 
1,381,180,000 shares are outstanding. Financial information provided by: http://www.wsj.com (9/20/2006).

The sudden availability on the open market of all of a company's stock, as a result of both the insiders and the company selling all shares held, could cause a plummet in the stock price (if unexpected and not already priced in by the market).

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