The stock of a business represents the equity stake of its owners. Its value is what's left of the company's assets available to stockholders after all debts are paid.
A holder of a share of stock (a shareholder) is an owner of a company. Ownership is based on the number of shares a person owns compared to how much outstanding (total) shares there are. For a company with 1,000,000 (1 Million) shares of stock outstanding, someone who owns 100 shares would own and have claim to 0.01% of the company's assets.
Perspective: Microsoft (MSFT) has about 8.4 Billion shares of stock outstanding
There are two main types of stock:
- Common stock usually entitles the owner to vote at shareholders' meetings and to receive dividends, but last in line to claim ownership on the company's assets.
- Preferred stock usually doesn't have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event that a company goes bankrupt and is liquidated.
Santa Claus Rally,
Mutual Fund Monday,
IPO (Initial Public Offering),
Earnings Disappointment (Miss),
Earnings Surprise (Beat),
Quarterly Earnings Report,
High Frequency Trading,
EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization),
Operating Cash Flow,
Book Value per Share,
Revenue Per Share,
Return on Equity (ROE),
Return on Assets,
Price-to-Earnings to Growth (PEG) Ratio,
Exponential Moving Average,
Percentage Above Moving Average,
Net New Highs,
Bullish Percent Index,
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