Shares are a central type of investment asset through which people obtain ownership stakes in the organizations that emit them. The moment you purchase shares you are investing on a piece of the company and thus you become entitled towards its profits and losses.
How do stocks operate?
There are occasions when through a joint stock system companies are able to raise capital through the sale of shares in their business. This fund flow is the centre of many a corporate activities. The proceeds that may be obtained from the offering of stocks can be used in a way such as product development, organisational expansion, or even alleviation of debts.
Normally, the process is initiated by an IPO, which is the case where the shares of a company are floated in the market for the first time. It is very important to noted that as soon as the stock of any company gets floated on the stock market the stock is eligible for trading among the investors. However, there is something that one should remember here and that is nobody directly buys/sells shares with the company, one basically deals with another individual investor.
