Even when you own a fraction of a share of a company, you are still considered a whole shareholder. (We often use the term “stockholder” in the U.S. and Canada.) A fractional-share investor will enjoy many of the same privileges as whole-share investors. Shareholders can’t make day-to-day operating decisions for a company, but they can vote on big decisions, attend the annual shareholders meetings, get dividends, exclusive discounts, and technically they own their percentage of the company and everything in it: offices, computers, vending machines, ping-pong tables, plastic ficus plants- everything.
Why would a company want strange people owning them? Well, when a company wants to raise money to keep growing but they don’t want to borrow money from a bank, the board of directors can decide to sell it to the public. This is called an initial public offering or an IPO. Once a company “goes public,” their stock can be bought and sold by anyone who can afford it. Here are a few of the benefits of owning stock:
1. Annual Reports
As a shareholder, you are sent a hard or digital copy of your company’s annual report. It’s a comprehensive paper on the activities and financial dealings of the company for the previous year. They’re usually pretty dull and dry, but some companies have made an effort to keep it interesting. Take a look at annual reports for over 5,000 companies right here.
2. You get a vote!
Learn more about what you can vote on and how (via email, snail mail, in person), right here at Investor.org.
3. Annual Shareholders Meeting
It’s like a gigantic board meeting, and every shareholder has a seat at the table. Amazon’s meetings are fairly staid, but this year the world’s largest e-tailer attracted some protesters which livened things up a bit. Warren Buffett’s company, Berkshire-Hathaway, hosts a meeting that has been called the “Woodstock for Capitalists.” The 3-day agenda kicks off with a “Shareholder Shopping Day” for discounts on B-H products. After the actual meeting, there’s a family-style picnic, and on Sunday, there’s a fun-run to help you “invest in yourself.” Read more about this year’s meeting here. Thanks, Warren!
4. You own X% of everything the company has
Want to figure out how much you own of a company? Here’s the handy formula:
# of shares owned
____________________ X 100% = percentage of the company that’s all yours!
# of total shares
When companies make money, they can distribute it to their shareholders as a dividend, or keep it and use it to run the company. Some companies like Coke (COKE) and Disney (DIS) are known as “dividend stocks” because they frequently give out cold, hard cash to shareholders.
6. Freebies and Discounts
7. Shareholder Swagger
Shareholderdom affords you some legit Wall Street cred. You are part-owner of a company. Or many companies! How cool is that?! Enjoy your newly-earned status as a Wall Street investor!