4.15 Lessons learnt
- The stock market is a regulated market where investors can buy and sell participations or stocks in publicly listed companies.
- Thanks to the regulation on the stock market, investors have extra security, not only is the execution of your orders controlled but also the stocks you hold are put in your name.
- The stock markets’ main purpose is to allow companies to apply for an IPO (Initial Public Offering) enabling them to raise capital.
- An investor will have to deal with a lot more topics than just the price of the share going up or down.
- An investor will have to make sure you also invest through a regulated broker that facilitates corporate actions such as emissions, splits, and maybe the most important dividend payment.
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An emission of new shares causes dilution of the number of shares outstanding and with that your rights as a shareholder. For a shareholder it is not a positive sign that a company is announcing an emission. In general but not always an emission is facilitated by providing rights to the existing shareholders to buy new shares at a discounted price.