The stock market is the global market of exchange where large sums of money move on a daily basis. The stock marketers do not trade the goods and services, they trade securities. Securities are rights to financial assets like business share. A share is a portion of ownership in a company. When a person buys a share in a company, it means that they are buying a small ownership in the company
Why are shares traded?
In order to build a large business, founders need resources. Companies typically sell their shares to raise capital to grow and expand their business. They do this through an Initio Public Offering(IPO). This means the company sell their shares to public investors in other words the company goes public and anyone can buy parts of the company. In order to facilitate the trade of the securities to the public.
NASDAQ: ACMR at https://www.webull.com/quote/nasdaq-acmr is one of such stock market. There are many stock exchanges in the world where stocks are traded. In the USA, you have a New York stock exchange and Nasdaq in New York City, TNS in India,and a few other Cities. These make a global exchange system where shares are traded all over the world. This allows companies to raise money to continue the growth and expansion of the companies. For example, Facebook, in it’s Initial Public Offering sold over 421 million shares and $38 per share. This earned Facebook over $16 billion from investors. Typically, share value reflects how the company is doing in its business. This made the companies grow gradually and this is great for investors because as the company grows in value, so does their original investment.
Why sometimes stock splits?
When the individual shares become so expensive and the average investors can’t buy their share, the stock splits. For example- you took your company into public with a hundred shares. You decided to sell fifty shares for $100 each as an IPO. But gradually the company has grown significantly and now each share is worth $500 and the average investors are no longer afford to buy your stock. So to make sure your company raises gradually, you should split your total share of the company into two-hundredI.e. split one share into two shares. Once the ono share is split, the value of each share also splits and becomes $250 for each share which the average investors can afford to buy and continue investing in your company.
Conclusion
By entering into the stock market, a company can make its shares if the company is public so that any investor can buy the shares at the best day trading platform. When the company raises, the shares become more expensive for investors to buy. To solve this, the company splits the shares to more shares, as a result, more investors can invest in your company and the company broadens rapidly. Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.