When people talk about stocks, they are usually talking about companies listed on major stock exchanges like the Nasdaq or the New York Stock Exchange (NYSE). Many people still do not know what exactly stock is, a Stock is a term used to symbolize an investor’s ownership in a company. A stock owner is also can be called as shareholder or stockholder. When you Invest in a company or basically buy their “stocks,” you own a percentage of their company with all their assets or liabilities. So where did the concept of buying or selling concept start and how?
Although many scholars believe that it started as early as the 1300s by the Venetians, also known as the best merchants at the time. The concept of “stock market” that exists today started by the Dutch East Indie Company originating in today’s Netherlands. When the trading started with countries of the “new world”, many merchants, businessman, and pioneers wanted to start their own business but lacked the capital to do so.
A group of investors around 1602 gathered around and pooled all their wealth and owning and became co-owners and business partners with individual shares in their businesses to form joint-stock companies. The Dutch East India Co. issued the first paper shares. This exchangeable medium allowed the shareholders to conveniently sell, buy and trade their stock with other investors and shareholders.
This idea became too popular too quick, at the time, most of today’s Netherlands were under Spanish occupation, the country lacked the capital to invest and trade with the new world, and the country was in economic crises. But thanks to the “Stock Market” method done by the Dutch East Indie Company, the country quickly became an economic giant and took control over the seas.
After their great success, other countries such as the French, the Portuguese, the Spanish and eventually, this practice even found its way all the way to England. Trade with the New World was such big business at the time, so trading ventures were initiated. Other industries during the Industrial Revolution began using the idea as a way to generate startup capital. This influx of money allowed for the discovery and development of the New World and for the growth of modern industrialized manufacturing.
Till’ Today, even though The Dutch East India Company went bankrupt in 1800, it still remains the richest company that ever existed.
Today, there are many stock issues all around the world, each supplying the capital necessary to support industry growth. This idea helps with the growth of many new ideas and new business, and with these investments, many revolutionary ideas would never come to practice or reality. It can be a situation where both parties could benefit from financially.
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The History Of Stock Market: How it started and by whom. was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.