![]() ![]() And their plans have to continue to make sense to you.Īt a certain point, rather than reinvest the profits back into the business. They have to keep all of you informed of their plans for growth to an extent. Meaning they are selling pieces of their company. They may use it to BUY out another company.īut since they are in the stock market. They may use it to advertise it to more CUSTOMERS. They may use research to make the product BETTER. They may find a way to make the product CHEAPER. They may use it to make MORE of their product. They can reinvest this profit back into their business. Now the perfect company that just keeps making a profit on that product they made must do something with all this extra profit. ![]() So you sell your stock in the company for much higher then you originally paid for it. So they keep offering you more and more money until a point that may seem unreasonable to you. Since the company is even MORE valuable then before, a person may come back to you and offer MORE money then you paid for that piece of ownership.Īs the company continues to operate, people keep buying and selling these pieces of ownership or stock.Īs the company repeats the process of making and selling products. Now more people see this and want a piece of ownership in the company. They are making MORE money now then when they first sold you a piece of their ownership. They should take that money from stocks or capitol and make a profit. If they are a well run business and you picked the right company in the right industry. ![]() They take all that cash and use it to make or market more of their product. If they sell enough of these pieces of ownership. So they offer partial ownership in a company for a small price. That is money they need to invest in their product. ![]()
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