Fully Diluted Shares Outstanding is the count of a company's common shares that would exist if every security able to become common stock, such as convertible notes and bonds, preferred stock, warrants, and employee stock options, were converted or exercised. It is the denominator used to calculate each holder's percentage ownership of the company.
When a company raises more money, it issues new shares to the investors. These new shares “dilute” the ownership of the previous shareholders.