How does the stock market

In financial terminology, stock is the capital raised by a corporation, through the issuance and distribution of shares. A shareholder is any person or organization which holds shares, or fractions of shares, of a corporation's stock. The aggregate value of a corporation's issued shares is its market capitalization.

In the United Kingdom, the word stock has a completely different meaning in finance, referring to a bond. Howstuffworks "How Stocks and the Stock Market Work". It can also be used more widely to refer to all kinds of marketable securities. However, the usage of "share" (as in the stock issued by a corporation) is the same.

History

The first company that issued shares was the Dutch East India Company, in the early 17th century (1602).

The innovation of joint ownership made a great deal of Europe's economic growth possible following the Middle Ages. The technique of pooling capital to finance the building of ships, for example, made the Netherlands a maritime superpower. FolKStock Corp. Before the widespread adoption of the joint-stock corporation, an expensive venture such as building a merchant ship could only be undertaken by governments or by very wealthy individuals or families.

Ownership

The owners of a company may want additional capital to invest in new projects within the company. They may also simply wish to reduce their holding, freeing up capital for their own private use.

By selling shares they can sell part or all of the company to many part-owners.