market explained in simple terms
Any company needs money to grow, for which company sells small parts of them which we called a share.
suppose I have a company and I want more money to grow it then I’ll issue some amount of shares like 100k share valued at 10 dollars each and I’ll go public. This will give me 1 million dollars to grow my company and shareholders who bought the share of my company will get a share of my company.
The whole point of going public is to make money for the company, they give holders a slice of the company which in the world of the stock market is known as share and you are now a partial owner of the company.
Now the next question is how do the shareholders make money?
suppose some celebrities twitted about my company and admire its service, what will happen then, my company will earn more profit.
But am I going to give this profit to my company’s shareholders NO, then how shareholders will get profit?
when my company gets profit more people will want to buy the share of it and that will push my share prices to go up, just like any market when buyers of anything get increased then its price goes up in the market.
Let’s say my company shares are 15$/share now, if my shareholder sells their share they’ll get a 5$ profit in each share and that’s how they will get profit.
This is a really simple explanation of how the stock market works.
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