Basic Terminology about Shares
Before we go to deep discussion about share market and stock ( since stock market is the hottest topic now almost everywhere in the World and even kids under 10 years old in China buy shares!!), I think it is important for us to learn some basic terminology in stock market!
Earnings per Share: The amount of profit to which each share is entitled.
Going Public: Slang for when a company is planning an IPO.
IPO: Short for Initial Public Offering. An IPO is when a company sells stock in itself for the first time.
Market Cap: The amount of money you would have to pay if you bought ever share of stock in a company. (To calculate market cap, multiply the number of shares by the price per share.) Short for Market Capitalization.
Share: A share represents an investor's ownership in a "share" of the profits, losses, and assets of a company. It is created when a business carves itself into pieces and sells them to investors in exchange for cash.
Ticker Symbol: A short group of letters that represents a particular stock (e.g., "Coca Cola" is referred to as "KO".)
Underwriter: The financial institution or investment bank that is doing all of the paperwork and orchestrating a company's IPO.