Explain It To Me Like I’m 9 : Stocks
What is a “stock”? You’ve heard the word over and over again. Sometimes you’ve probably heard it called “stonks”. Today we’re going to clear up what that is exactly in super simple terms.
What’s a Stock?
Simply put, a stock is a piece of a company. Let’s say I realy liked Microsoft as a business, and I wanted to get in on that business. I could buy stock in Microsoft and that would make me part-owner of that company. If I bought 1 “stock” of Microsoft, we would call that 1 “share” of the company. It’s called a share because that is my slice of the pie that is Microsoft. I would own 1 share of the entire company.
The value of 1 share is going to differ from company to company. Imagine if a company only had 10 shares and I bought 1 of them. That would make me a 10% owner of the entire business. In reality though, most big companies have millions of shares. Going back to our Microsoft example, that company has 7.473B shares out in the world so if I bought 1 share of those 7.473 billion shares I would own 0.0000001336% of the entire Microsoft company. You can of course buy more stock in the company if you have money available. The more stock you own, the more of the company you own. So if I bought 1000 shares of Microsoft I would own 0.01336% of the company.
