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Apologies if this is a duplicate, but someone (quite possibly me) is confused about whether stock shares can be arbitrary manufactured at any time and in any quantity, or whether they in fact represent partial ownership of the company and can be reorganized (eg, repurchased by the company, or company-owned shares sold) but not multiplied after the issue.

This gets to the basic question of what a share "is". I thought I understood that, but possibly not, and if I'm wrong I'd like to be corrected.

keshlam
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A share of stock - as you point out - is fractional ownership of a company. The terms of that ownership vary, but usually include voting on board members, a proportional share of any dividends, etc.

A company can generally create (issue) and sell new shares of stock as much as they want, subject to existing shareholder or board approval. This will dilute existing shareholders of course, but this doesn't necessarily mean the share price will go down. The company should be more valuable after this in total, as they got a huge pile of cash for those new shares.

Suppose the company has $100M in the bank, no employees, and no other assets. There are 1M shares of stock. Roughly you would expect those shares to be worth $100 each. Now the company issues and sells 500k more shares at the $100 market price. Now there are 1.5M shares and the company has $150M in the bank - still roughly $100 per share.

Michael
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