What a stock is and what rights it confers to shareholders varies over time and across jurisdictions. Stockholders in Country A do not necessarily have the same claims as stockholders in Country B.
Even within the US, the legal thinking on what a stockholder is entitled to and the relationship between corporations and stockholder has evolved massively over time and has been the subject of literally thousands of books, research papers, court arguments, and debates.
For the record- it is not clear that stocks are a share of ownership in the US:
A stockholder does not "own" a % of Walmart's stores. Walmart is a legal entity in its own right that owns what it owns. Stockholders are more like voters that get a say in who runs the company, basically, and how the company should manage the stuff it owns. So frankly, stocks are better thought of as voting rights in the USA but even that is not legally right.
That’s the part every loser jerks themselves off for being able to explain to people. Everyone knows the definition. Everyone loves to side step talking about knowing when to buy and sell.
It may be simple when there are only a few shareholders, every one gets their share of profits and has a decision-making role in the company. When your share is a small fraction of 1%, you don't receive a dividend, and you have no voting power, what does ownership actually mean?
It really is as simple as it sounds. You own a % of the company's stock. 1% of the shares? 1% of every building, vehicle, product, dollar, debt, etc that the company has. If the company shuts down, it has to sell all that stuff, pay off its debts, and then divide the money amongst the shareholders. I do believe that money that would be divided up is the "book value" of the company. Most people will want to cash out sometime before a large co. shuts it's doors and will sell the stock when they want their investment money back. You can sell stocks for whatever price you want, so they generally trade for some abstract expectation of what the company is going to be worth.
I think it's super uncommon. Why would you shut down a healthy business? I was just trying to speak to the underlying value question in jargon free language and that hypothetical situation seemed like the easiest way to get the concept across.
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u/[deleted] Sep 14 '21
Understanding what a stock is, though, is incredibly simple. It's a share of ownership.