Share (or Stock)

A share is a unit of account for various investments. It often means the stock of a corporation, but the term is also used for collective investments such as mutual funds, limited partnerships, and real estate investment trusts.

In the United Kingdom and Australia, the word share is used the same way as stock is described in the United States.

Dividends are payments made by a company to its shareholders. When a company earns more money than it spends, the extra money can either be spent on making the company better or it can be given to the people who own stock in the company as a dividend. In the financial history of the world, the Dutch East India Company (VOC) was the first recorded (public) company ever to pay regular dividends in 1602.

The VOC invented the idea of investing in the company rather than in a specific venture governed by the company. The VOC was also the first company to use a fully-fledged capital market (including the bond market and the stock market) as a crucial channel to raise medium-term and long-term funds. The VOC paid annual dividends worth around 18 percent of the value of the shares for almost 200 years of existence (1602–1800).

 Bond from the Dutch East India Company dating from 7 November 1623

In 1719, the South Sea Company proposed to convert £30,981,712 of the British national debt. At the time, government bonds were extremely difficult to trade due to unrealistic restrictions; for example, it was not permitted to redeem certain bonds unless the original debtor was still alive. Each bond represented a very large sum, and could not be divided and sold. Thus, the South Sea Company sought to convert high-interest, untradeable bonds to low-interest, easily-tradeable ones. The Company bribed Lord Stanhope to support their plan; they were also supported by Lord Sunderland. Company prices rose rapidly; the shares had cost £128 in January 1720, but were valued at £550 when Parliament accepted the scheme in May. The price reached £1000 by August. Uncontrolled selling, however, caused the stock to plummet to £150 by the end of September. Many individuals—including aristocrats—were completely ruined. The economic crisis, known as the South Sea Bubble, made King George I and his ministers extremely unpopular and resulted in the rise of power of Britain's first prime minister, Sir Robert Walpole.

1720 "South Sea Bubble" from the mid-19th century, by Edward Matthew Ward

On July 3, 1884, Dow Jones and Company published its first stock average index. The inaugural index was published as part of the "Customer's Afternoon Letter" and consisted of 11 stocks, nine of which were railroad stocks, since railroads were considered the largest and sturdiest companies in the U.S. at the time.

In 1887 Irishman John Boyd Dunlop invented the pneumatic tyre to stop his son getting headaches from riding his bumpy tricycle. Commercial production began in late 1890 in Belfast. Dunlop assigned his patent to William Harvey Du Cros, in return for 1,500 shares in the resultant company.

Wall Street Journal editor and Dow Jones & Company founder Charles Dow published the first edition of the Dow Jones Industrial Average on May 26, 1896. There are 30 companies, all from the USA, and traded on either the NYSE or the NASDAQ, that make up the Industrial Average.

Historical logarithmic graph of the DJIA from 1896 to July 2011.

When he was UK Chancellor of the Exchequer, David Lloyd George was caught buying American shares in Marconi on basis of inside information that they had just secured a government contract.

October 24, 1929, a day known now as "Black Thursday," saw the stock markets take an 11% tumble that shook investors to their core. Markets dropped by another 13% on "Black Monday" after the weekend and then another 12% on "Black Tuesday." The losses continued and saw the markets crash hard in front of the broader economic crash that would become the Great Depression.

The Dow Jones Industrial Average reaches its lowest level of the Great Depression, closing at 41.22 on July 8, 1932.

When the Ford company went public in 1956, the Ford family, through special Class B shares, retained 40 percent voting rights.

Immediately after the 1986 Challenger explosion, shares of every corporation involved in the Space Shuttle dropped. But by the end of the day, most had rebounded; only Morton Thiokol remained low. This was months before the official investigation found Thiokol to be responsible for the disaster.

Google's initial public offering of stock was on August 18, 2004. The initial price was set at $85 and ended the day at $100.34 with more than 22 million shares traded.

In 2005, Facebook hired graffiti artist David Choe to paint murals in their new office space. Choe accepted Facebook shares instead of a cash payment, and when Facebook went public in 2012, his shares were valued at $200 million.

In 2018, Mark Charles Barnett of Ocala, Florida plotted to plant small bombs in Target stores along the Eastern seaboard disguised in food packages. He hoped to create bad publicity for Target, which would lower stock prices and allow him to buy cheap shares before they rebounded. Barnett was caught after paying someone else to plant the bombs.

Following concerns over the ongoing COVID-19 pandemic, The Dow Jones Industrial Average fell 2,997 points  – nearly 13 percent – on March 16, 2020, the largest single-day point loss in its history

Statistics show September is the only month when share prices are likelier to fall than rise.

Source Equities