School

Module 1 — Foundations

What a share actually is

4 minute read

In plain English

A share is a small ownership slice of a company. If a company is divided into 100 million shares and you own 100, you own 100 millionths of it.

Why it matters

Everything else — price, volume, volatility — is people disagreeing about what that slice is worth right now.

Example

A company worth $500 million with 100 million shares works out at $5 per share. If the market decides it is worth $600 million, the same share is $6.

Try this

Look up any ticker on the Radar and read its market capitalisation and share count. Check that the maths roughly agrees.

Common mistake

Thinking a $2 stock is 'cheaper' than a $200 stock. Price per share says nothing about value without the share count.

What this does not mean

Owning a share does not entitle you to a price rise, a dividend, or any return at all.

Educational content only. Not financial advice.