There is no doubt that by creating and operating a business it is possible to make a fortune. With his oil exploitation, John Paul Getty became, in his time, the richest man in the world. A modern example it would be Bill Gates, founder of Microsoft. More recently, young entrepreneurs have become billionaires in record time: people like Jeff Bezos, founder of Amazon, Larry Page and Sergey Brin who started Google, Mark Zuckerberg who created Facebook …
It is true that such successes are exceptional. To succeed in such a way, you need to have a great idea, a solid business model, the financial means necessary to mount your business, products or services that many – really many! – people want to buy … And yet, even the best business idea in the world is never a guarantee of success.
Fortunately, to become a business owner, you do not necessarily need to create one. You can simply buy an existing business, preferably one that is well established, has good products, which earns a lot of money …
The downside is that the companies that are best-known and make the most money are worth billions: the value of a company like Apple is thus estimated to be some $ 650 billion, that of the oil company American ExxonMobil 330 billion. Google is worth $ 490 billion, Microsoft 435 billion. *
Buying such a company is therefore excluded, but that does not prevent us from buying a small part of it. So we can become a co-owner of the company in question, we are entitled to a portion of the profits made and distributed by the company in the form of a dividend, and if the business thrives and grows, we participate in the increase its value.
But how to do it ?
How to become a co-owner of a famous brand
Becoming a co-owner of one or more of the major world-famous multinational companies is relatively simple. The vast majority of these companies have the legal form of a ‘public limited company’ or ‘plc’ (Aktiengesellschaft – AG in German, société anonyme – S.A. in French). This means that the money (or capital stock) that the founders put at the disposal of these companies at their creation is represented by shares or stocks.
A stock is an ownership certificate received by the founders of a company in return for the money that they make available to the company. The holders of shares are called shareholders. A company can belong to one owner / shareholder, which then holds all the shares, or to several shareholders who each receive only a portion of the company’s shares, depending on the amount of money they have put at the disposal of the company.
A shareholder is not obliged to hold on to these shares until the end of his or her days, he may also sell them to third parties. This is our chance to become ourselves a co-owner of a company, by purchasing these shares, these ownership certificates – that we can sell again later if we want to.
A second way of becoming a shareholder is to take part in a capital increase initiated by a company. Such a capital increase is made for example if a company needs substantial additional financial resources to build new production facilities or developing new products. The company is then looking for new investors willing to put money at its disposal and to become co-owner of the company. In this case, the company issues new shares that these investors receive in return for their investment. Thus the very large multinational companies end up having hundreds of thousands of shareholders.
This does not happen automatically. A company must first make a request to a stock exchange to accept its shares for trading and establish the price. If this is the case, we say that a stock is publicly traded.
The price of a stock varies according to supply and demand for this stock, and these are influenced by investors’ expectations about the future development of the company in question.