| In order to understand what stocks are
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| | you own, the more of the company you own,
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| and how stock markets work, we need to
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| | and the more control you have over the
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| dive into history--specifically, the
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| | company's operations. Companies sometimes
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| history of what has come to be known as
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| | issue different classes of shares, which
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| the corporation, or sometimes the limited
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| | have different privileges associated with
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| liability company (LLC). Corporations in
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| | them.So a corporation creates some
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| one form or another have been around ever
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| | shares, and sells them to an investor for
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| since one guy convinced a few others to
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| | an agreed upon price, the corporation now
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| pool their resources for mutual
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| | has money. In return, the investor has a
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| benefit.The first corporate charters were
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| | degree of ownership in the corporation,
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| created in Britain as early as the
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| | and can exercise some control over it.
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| sixteenth century, but these were
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| | The corporation can continue to issue new
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| generally what we might think of today as
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| | shares, as long as it can persuade people
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| a public corporation owned by the
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| | to buy them. If the company makes a
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| government, like the postal
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| | profit, it may decide to plow the money
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| service.Privately owned corporations came
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| | back into the business or use some of it
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| into being gradually during the early
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| | to pay dividends on the shares.Public
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| 19th century in the United States ,
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| | MarketsHow each stock market works is
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| United Kingdom and western Europe as the
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| | dependent on its internal organization
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| governments of those countries started
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| | and government regulation. The NYSE (New
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| allowing anyone to create corporations.In
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| | York Stock Exchange) is a non-profit
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| order for a corporation to do business,
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| | corporation, while the NASDAQ (National
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| it needs to get money from somewhere.
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| | Association of Securities Dealers
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| Typically, one or more people contribute
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| | Automated Quotation) and the TSE (Toronto
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| an initial investment to get the company
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| | Stock Exchange) are for-profit
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| off the ground. These entrepreneurs may
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| | businesses, earning money by providing
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| commit some of their own money, but if
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| | trading services.Most companies that go
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| they don't have enough, they will need to
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| | public have been around for at least a
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| persuade other people, such as venture
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| | little while. Going public gives the
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| capital investors or banks, to invest in
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| | company an opportunity for a potentially
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| their business.They can do this in two
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| | huge capital infusion, since millions of
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| ways: by issuing bonds, which are
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| | investors can now easily purchase shares.
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| basically a way of selling debt (or
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| | It also exposes the corporation to
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| taking out a loan, depending on your
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| | stricter regulatory control by government
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| perspective), or by issuing stock, that
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| | regulators.When a corporation decides to
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| is, shares in the ownership of the
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| | go public, after filing the necessary
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| company.Long ago stock owners realized
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| | paperwork with the government and with
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| that it would be convenient if there were
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| | the exchange it has chosen, it makes an
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| a central place they could go to trade
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| | initial public offering (IPO). The
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| stock with one another, and the public
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| | company will decide how many shares to
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| stock exchange was born. Eventually,
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| | issue on the public market and the price
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| today's stock markets grew out of these
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| | it wants to sell them for. When all the
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| public places.StocksA corporation is
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| | shares in the IPO are sold, the company
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| generally entitled to create as many
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| | can use the proceeds to invest in the
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| shares as it pleases. Each share is a
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| | business.
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| small piece of ownership. The more shares
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