What Is Stock? A Filipino style explanation

Filipinos should understand the meaning of Stock before they invest any money in the Philippine Stock Market. So that they will know where their money goes.

There are two things you need to learn from me today – stock and shares.

Read the short story below so that you will understand the concept of Stock Market.

Juan and Pedro are best of friends since their high school days. After college they decided to build a food business that serves the best pork barbeque in the Philippines. After a year their business grows and they decided to expand.

Juan had an idea and told Pedro about it.

Juan: Pedro, to be able to generate P1,000,000.00, we need to incorporate our company so that we can offer it to the investors of the Philippine Stock Exchange.

Pedro: Hmmmm…that is a good idea. We can offer “100,000” shares in our initial public offering or P10/share.

Juan: I think P10 per share is a good price because Pinoy’s love our barbeque.

Juan immediately made the offer to Philippine Stock Exchange and they named their company JP Corp.

What Is Stock?

Stock is a representation of a Company (JP Corp in our example). While shares is a tiny piece of that Company (P10/share).

So when you invest in the Stock market, you will become a part-owner of Jollibee, Ayala, Meralco, ABS-CBN, GMA, PLDT and more. That is an awesome opportunity right?

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