1 Once upon a time, when you bought broccoli you bought the whole vegetable, stems and crowns. Then it became customary for grocery store produce departments to separate the crowns from the stems and to sell the crowns at a premium. 2  Iâm not a fan of this practice, because I like both parts of the broccoli plant.
A company's first issue of common stock to the public is called an Initial Public Offering. Afterwards, a corporation may issue new equity at any time in order to finance its growth. When new common shares are offered to existing shareholders first, this is called a rights offering.
You decide you need $100,000 to get the business off the ground so you incorporate a new company. You divide the company into 1,000 pieces, or shares of stock. (They are called shares because each piece of stock is entitled to a proportional share of the profit or loss). You price each new share of stock at $100.