Becoming a co-owner of one or more of the major world-famous multinational companies is relatively simple. The vast majority of these companies have the legal form of a ‘public limited company’ or ‘plc’ (Aktiengesellschaft – AG in German, société anonyme – S.A. in French). This means that the money (or capital stock) that the founders put at the disposal of these companies at their creation is represented by shares or stocks.
A stock is an ownership certificate received by the founders of a company in return for the money that they make available to the company. The holders of shares are called shareholders. A company can belong to one owner / shareholder, which then holds all the shares, or to several shareholders who each receive only a portion of the company’s shares, depending on the amount of money they have put at the disposal of the company.
A shareholder is not obliged to hold on to these shares until the end of his or her days, he may also sell them to third parties. This is our chance to become ourselves a co-owner of a company, by purchasing these shares, these ownership certificates – that we can sell again later if we want to.
A second way of becoming a shareholder is to take part in a capital increase initiated by a company. Such a capital increase is made for example if a company needs substantial additional financial resources to build new production facilities or developing new products. The company is then looking for new investors willing to put money at its disposal and to become co-owner of the company. In this case, the company issues new shares that these investors receive in return for their investment. Thus the very large multinational companies end up having hundreds of thousands of shareholders.
This does not happen automatically. A company must first make a request to a stock exchange to accept its shares for trading and establish the price. If this is the case, we say that a stock is publicly traded.
The price of a stock varies according to supply and demand for this stock, and these are influenced by investors’ expectations about the future development of the company in question.
