Important Concepts Of The Stock Exchange, Just as there are shops specializing in certain goods, when someone required to buy or sell your share of a company, the place to do it is the bag.
There is much ignorance about the stock, which in turn causes many myths. It is thought that it is a place where the speculators come together to make money at the expense of others, or that it is extremely risky. In reality, this is nothing special.
Have you ever wanted to start a business? You generally have three options:
1 start a business yourself, from scratch.
2 buy a franchise or acquire a business that already exists.
3 partner with someone who already has a successful business, which is doing well but need more money to make it grow.
In the first case, you have to set up a company. You can be the sole owner, or as it happens in many cases, ask someone else to participate with 0.01% of the capital, to use the figure of “sociedad anonima”. The capital of the company is divided into shares, representing the portion of the capital that each of the owners has.
In the second case the same thing happens. If the company already exists is that document notarized the purchase, in Exchange for which you receive the actions of the previous owners.
In the third case it is an enlargement in the capital of the company, an additional contribution to the capital that exists today. This means you have to issue new shares representing that contribution which will give you, which in turn makes you, in part, that business owner.
The bag is a specialized shop
As well, this is what do the companies when they go to bag. To grow, they need additional capital, so it must find new partners who want to provide that capital. The simple way to find those partners, is to make a public offer, in such a way that all people who are interested to invest in that company.
Now, in the same way that there are shops specializing in certain goods (for example, if you want to buy shoes should go to a shoe store), when a company wants to make a public offering of stock, has to do it also on a “shop” specializing in it, which is called stock.
When a company makes a public offer, the company becomes also public. I.e., anyone can get information about their results and performance – not only shareholders.
To get started, launch a public offering, it implies that the company has to provide information to people interested in buying it, so people know under what conditions is.
But also, once people bought that company’s shares through the stock exchange, you may have the option of selling them in the future, where that investment no longer suits you, or requiring their money back.
Of course, so that other investors can evaluate whether to buy those shares, they need up-to-date information.
Therefore it remains public, so everyone can have elements that allow them to assess the appropriateness of buy or sell a share.