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I have some questions about shares/stocks?
11-27-2012, 06:46 AM
Post: #1
I have some questions about shares/stocks?
Question One) Why do companies have different volumes of shares? For example:
Tesco PLC Has 11,967,898 Shares.
Facebook Has 18,795,260.
Ford Has 14,243,505.

Question Two) Because they have different volumes, I assume more shares can be created? Am I right?

Question Three) If more shares can be created, when they are created, then surely the price of existing shares would go down?

Question Four) If the price of the shares go down when more are created, this would surely be unfair on current shareholders, as their share prices would go down also, meaning they would lose money.

Question Five) Say you bought 1000 shares in Facebook which would be 21.66 x 1000 = 21,660.
The price per share went up by $1 in one day. Your shares would now be worth 22.66 x 1000 = 22,660 Meaning you have made a $1000 profit in one day. However you have invested $21,660 to make $1000? This to me seems like a pretty poor investment to me because there is also the possibility that they can go down. Investing $1000 to make $1000 would be a much more beneficial investment (In terms of other investments, I'm not talking about shares).

Again, one tesco share is $329.10 to buy 1000, it would cost 1000 x 329.10 = $329,100
If over one day one share went up by $1, they would then be worth $330.10 each overall equalling $330,100 making you $1000. Again to me this seems like a worthless investment, investing over $300,000 dollars to make $1,000? I may be missing something like, "Usually people invest over long periods of time like a month, hoping they go up by $10-$100 each making it a worthy investment." However I was always under the illusion that people would buy one day and sell the next. Perhaps I am missing something.

Thanks for any help, I am only 15 but I'm trying to learn the basics. Thanks again.

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Messages In This Thread
I have some questions about shares/stocks? - Benjamin - 11-27-2012 06:46 AM
[] - Steve D - 11-27-2012, 06:55 AM
[] - frozen555 - 11-27-2012, 06:55 AM

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