Due to the facility with which they can be transferred, the market of ordinary shares is usually active and dynamic. The ordinary shares are one of the most liquid investments on the market. However, you have to have in mind, that in case of bankruptcy of the society, the reclamation from part of the ordinary shareholders would be subordinated to that of the creditors and to that of the preferential shareholders.
This should make you to always remember, that as an ordinary shareholder, what you possess is a bond with the destiny of the company and that you are exposed, as consequence, to win or loose according to the good or bad fortune of the same.
IN your condition of investor you should be familiarized with certain terms and key concepts related to the ordinary shares.
Now days, the equal value of the nominal value have scarce importance. Many anonymous societies assign a nominal value to their shares.
Many years ago there existed the custom of calling equal value to the price that ordinary shares of a company at the beginning of a public offer.
Now days the nominal value doesn’t have any importance and it’s only used for accounting concepts that most of the big societies assign to their ordinary shares. Some don’t even get assigned any value at all?.
When an anonymous society is established, the directive org decides the number of shares to issue. To be able to propose new offers in the future, the usual is for the management to authorize a great number of shares than that intended to be offered at the first instance. The excess securities are known as authorized UN issued shares. With the previous authorization of the shareholders, the management can increase at any moment the number of the authorized hares. The circulating issued shares are authorized securities that have been distributed to the investors.
To make the new issue of shares more attractive, the society can enclose a buying certificate to the authorized UN issued shares. This certificate gives the shareholder the long-term privilege for subscribing ordinary shares, generally at a fixed price, even when at the moment of the offer. The price of subscription of a certificate is greater than the market price of the guaranteed securities; it is still interesting for the investor because it offers the possibility of a high percentage of profit.
It might occur that after an anonymous society goes on the market, its management will decide that on a determined moment they will rescue (buy) part of their ordinary shares. The shares so rescued, the same as those acquired by donations, receive the name of portfolio shares. A company can rescue its own shares, if these are being sold at an extremely low price, or also in the supposition that the management is trying to avoid a hostile absorption, wants to buy another company or to fulfill option compromises for buying shares.