What is stock?
submitted by REDDY

Arnold

When capital is contributed and ownership certificates issued to document ownership in a corporation, those certificates are stock.

jenson

When people talk about "stock," they're usually referring to pieces ("shares") of ownership in a company. A stock share is a slice of the pie of ownership. If it's a good pie, your slice is worth more if you want to sell it.

Companies sell stock to raise money from investors.

tilly

Stock is ownership in a company.

Stocks are typically traded on stock exchanges like the NYSE or NASDAQ. When you buy stock, you're really buying a "security" (as the government likes to call them) that represents your piece of ownership.

There are different types. You've got common stock and preferred stock. Common stockholders usually have voting rights in the company, while preferred stockholders might get dividends before common stockholders.

mike ellsworth

If you're looking at stocks from an accounting perspective, stocks are considered equity on the balance sheet. When a company issues stock, it’s essentially raising capital that doesn't need to be repaid like a loan would. Instead, shareholders become part-owners.

On the flip side, when a company buys back its own stock, that’s called a share repurchase.

jill

When you buy stock, you're indirectly supporting companies. They get capital to expand, hire new employees, and develop their products. It's a cycle that keeps the economy moving.

If you're asking about stock from an investor point of view, stock is a chance to buy shares (ownership) in a company. When the company makes money, your shares become worth more, and you can sell them for a profit.

Say you buy 1 share of a new zeta-quant microchip company. Nobody has heard of the technology, so it's $1 a share. Eventually their new tech catches on and the company is worth many billions of dollars. Now your share, which is just one little piece of ownership, is worth $2,500. Of course, investing is usually a lot more boring. It's more like, Online Retailer A is still growing steadily. You buy $5,000 worth of stock, and in a year it's work $5,250. Not amazing, but better than letting the money sit in your sock drawer.