Ownership in a company
A is a unit of ownership in a company. When you buy a , you become a part-owner — entitled to a slice of its , earnings, and future growth. Companies issue stock to raise capital without taking on debt.
A stock is simply a small piece of a company sold to the public.
How stocks trade
are bought and sold on exchanges like the and NASDAQ. Prices fluctuate constantly based on supply and demand, shaped by earnings reports, economic news, and . equals the price multiplied by the total number of .
Common vs preferred shares
Common stockholders vote on company decisions and may receive . Preferred shareholders have priority on dividends and if a company goes bankrupt, but usually no voting rights. Most retail investors hold common .
Why prices change
prices reflect the market's collective expectation of future earnings. When a company beats earnings expectations, the price typically rises. When it misses or bad news surfaces — competitive threats, regulatory issues, macro headwinds — the price falls.
Prices are driven by future expectations, not current reality.