1: shares definitions
2: shares works
3: shares class
4: shares benefits
Quick Pick :
One whole ownership of multiple small pieces of certain company was considered as a shares in the public market.
Taking one matter or material and dividing that one matter into multiple little pieces is called the shares. Deeply the each pieces are the shares.
It doesn’t matter this shares principal are applied to chocolate to mountain. Let’s say if chocolate as one material and divide that chocolate into 6 pieces which leads that each pieces as a share of chocolate.
When the split or dividing or part doesn’t happen in any of the matter or material, then that particular matter doesn’t have an any shares.
this article occupied the information about what is really mean shares in the stock market And how shares are works and what are the types of share and how shares benefit all the stock investors.
1: shares definitions
Each and every public companies have highest need and the companies primary purpose to raise capital for their industries.
The needed capital could be more than 100 millions to 1 trillion dollars nowadays. But this needed capital or money doesn’t possible to collect from one or two investors.
That’s the reason where every public industries split their ownership into multiple little pieces of shares.
Dividing and splitting the ownership as much as possible would helps the companies to accumulate the needed cash for their industries.
So when comes to shares, it’s works quite different and produce equal results for all the owners of the company in the stock market.
2: shares works
The shares are the one which helps the ownership treat equally and produce same profits or distribution or results. Without shares it wouldn’t be possible.
When the public companies divide the ownership into little pieces , this pieces are the shares, the pieces are owned by hundreds and thousand of general public.
This public ownership are treated based on the how much pieces of shares the particular person had owned. It doesn’t matter the person had owned 50 percent of the pieces or 1 percent of the pieces of shares. .
The ownership are treated equally without any confusion and distraction.
Let’s say the public company D have one ownership before it’s gone public. After the company D gone public the one ownership divide into 1000 little of pieces shares.
So this year the company D had made it 1 billion or 1000 millions dollars in the net profit. And company D doesn’t used the profits to reinvest inside the company.
Moreover company D decided to distribute all the profits to it’s shares holder’s. We know that company D ownership had divided into the 1000 pieces of shares.
So the each share have receive the 1 millions dollars and 1000 pieces of shares totally receive the 1 billion dollars in distribution without any confusion the shares helps the owned owners to get their money equally.
The Company D couldn’t distribute it’s all profits correctly to their all owners without dividing the ownership into the shares. So the shares are the only one which helps owners to connect to the company and take equal rights for their ownership.
However the public Companies have the class on shares they distribute and issued to the public, so let’s see what it is.
3: shares class
Every public Companies have the shares class on the ownership. This shares class helps to determine the quality and rights types and control in the companies.
Let’s say the company E had 100 pieces of shares. The 100 shares are didn’t have the equal rights but it’s have different class in if.
The companies have the authority to choose the shares class types at the beginning but not every time.
The shares types helps and protect the company to not to take over full company by single or less person.
Let’s say the company E decided to make 50 shares as class A and another 50 shares as class B. But each class of shares don’t have same the voting rights inside the company E.
It’s depends on the how the company might decide on the shares class type. If shares class A have the more voting rights than class B. Then class A have majority of the rights to take control and decision in the company.
On the other hand if class B have more rights than class A. Then class B shares owners have the majority of the rights and control on the companies.
This all depends on which class type of shares have more rights to vote in the company. But the profits or distribution could not be vary, it’s all same for all the share holders.
In stock market the company might have the different shares types and different class types. The different shares types are types of shares which the shares have different purpose.
But the difference types of class shares are in every type of shares. So don’t confuse the different share class type and different shares types.
Now let’s take a look what is the real benefits for the shares in the stock market and most importantly Why investor need shares in the stock market.
4: shares benefits
When industries ownership didn’t divide into pieces to own for investor. Every public Industries get very hard to find the single investor for multi billion dollars.
When the ownership get into the little pieces there is huge opportunity for all the small to big investors.
Without dividing anything as shares it’s impossible to own by all types of investors because nowadays 80 percent of the investor are small investor there are less percentage of people’s alone having millions to invest.
Other people’s are having very low amount which is less than 100k dollars. Not diving the ownership leads the small investor very difficult to assess and bought the certain company.
Market rule: #100140
Shares are the market rules, without shares none of the stock of shares of ownership would be bought and sold in the stock market. But any action or activities you perform using your own method or Strategy are completely responsible from your side.
If your investors and not comfortable or align investing with based on market rules please learn about how to regulate your investments under your control with use of Rule investing.