The Stock Market Shares. One day, Jane had a great idea for a whole range of new computer games. She played a lot of computer games and her friends had.

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Presentation transcript:

The Stock Market Shares

One day, Jane had a great idea for a whole range of new computer games. She played a lot of computer games and her friends had talked a lot about what made a good game.

However, Jane had no idea of how to write a computer program so to create her game she would have to hire someone.

Jane also knew that if she wanted to sell her games all over the World, she would need to hire people to package the games and distribute them to shops.

Jane’s ideas were good but she needed a lot of money to get things started. She decided to SHARE her idea and her work.

Jane formed a Company and called it CoolGames. She needed a team of people to share the work and needed $200,000 to get things started. CoolGames was divided into 500,000 shares. Jane kept 300,00 shares because it was her idea and sold 200,000 shares at $1 each to raise the money she needed.

Many people bought CoolGames Shares. Some only bought 1000 shares each. One Man, Fred, bought 50,000 shares. Eventually, all 200,000 shares were sold and Jane had her money. Jane hired her software programmer and her sales people.

At the end of the first year, CoolGames had only made a small profit of $5000. The Company split this up between the share holders, each share getting a DIVIDEND of 1c This means that Jane got $3000 for her 300,000 shares. Fred, with 50,000 shares got $500 People with only 1000 shares got $10

Fred was not happy at only making $500 so he sold his 50,000 shares on the STOCK MARKET. The company had not done very well so the most he could get for them was 20c a share, or $10,000. Fred had lost $40,000

His shares were bought by Julie for $10,000, who had heard that CoolGames were starting to get more popular. After the second year, sales for CoolGames had gone up a lot and everyone thought they were really cool. Julie managed to sell her shares at $1.20 a share, a profit of $50,000.

Thousands of shares in hundreds of companies are bought and sold every day on the STOCK MARKET. This is called SHARE TRADING. A person who buys and sells shares for other people is called a STOCKBROKER. The price of a company’s shares go up or down according to how well it is doing or how well people THINK it is going to do in the future.