Finance Glossary
Share
What is a share?
A share is a security representing a fraction of a company's share capital. By purchasing shares of a company, the investor becomes a "shareholder." They are associated with the risks and benefits.
A share grants its holder the right to information, the right to vote at the general meeting of shareholders, and the right to receive a dividend if applicable.
The amount of the dividend paid once a year depends on the decisions made at the general meeting of shareholders, which are based in particular on the profits made by the company over the past year.
How does the price of a stock change?
The stock price changes based on:
- the company's financial performance,
- the economic and financial climate,
- investors' confidence in the company's growth potential.
When the combination of all these factors is favorable, more investors want to buy shares: their value rises.
When it is unfavorable, investors seek to sell them because they believe their value is about to decline. The price falls. This notably explains why investing in stocks does not guarantee the capital invested.