As we have mentioned before, the companies that participate in the stock market what they want is capital, generally to expand (for example, for the implementation of growth projects that improve their infrastructure, labor, products, etc.).
These projects need financing to be carried out.
To get that capital there is an option for the company to apply for a loan but getting enough money to make an investment that magnitude through loans is not generally one of the most viable solutions.
One of the most decisive reasons why companies decide to go public is for the collection of external resources to obtain financing.
Companies sell their shares in IPO s, initial offering of shares or Initial Public Offering for their words in English, so that other people can buy and invest in the company. In this way the company gets enough capital to re-invest in themselves and, therefore, grow.
After the launch of the shares and their purchase by the public, the shares remain in the hands of individuals who can also sell them or buy more, for that they also use the platforms and that is where the stock market also comes into play .
It is not surprising that companies that dominate the market, such as Facebook, Apple, Google, among others, have their shares in the stock market.
On the other hand, the company ceases to have its own property and becomes public, the shareholders being its owners.
The shareholder becomes a partner and has part of the ownership of the company, so he acquires the right to participate in the benefits of the company proportional to its quota, that is, to the shares purchased.
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That is why the greater the investment in shares of a company, the greater the return.
On the other hand, the risk is also proportional to the investment and may have large losses, if the company does not generate a return, the shareholder will not receive benefits either.
It is for this reason that we can find from people who become millionaires by investing in the stock market to people who go bankrupt and lose all the money.
Making a simple summary, investing in the stock market means that individuals like you buy a part of a company to later sell that part at a higher price. You buy a share at Rs 100 and sell it at Rs 150, you earn Rs 50 with the operation.
What is a broker, broker or broker
If you search online where to invest in the stock market, a series of intermediaries will appear. Thus, a stockbroker, also known under the term broker or brokerage firm can be a person, a company or even a bank. They are dedicated to act as intermediaries between the companies that sell their shares and the investors that want to buy.
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