mint&machine

When you hear the words “stock market,” you’re probably thinking of people staring at screens filled with numbers, watching stocks go up and down. That’s definitely part of it, but the stock market is much more than that.

At its simplest, the stock market gives people a way to buy part of a company. A stock represents ownership in a business, so when you buy a share, you are technically becoming a small owner of that company. According to Investor.gov, companies issue stock to raise money for things like launching new products, expanding into new markets, building facilities, or paying off debt.

That made me wonder, why would a company want to sell part of itself?

Imagine you start a small business selling sneakers. At first, you might be able to run everything yourself. You sell 100 pairs, make some money, and use those profits to buy more inventory. But eventually, you might want to open stores in other cities, hire more employees, build a website, and produce thousands of pairs instead of hundreds.

The problem is that all of that costs money.

You could borrow money from a bank, but then you would have to pay the loan back with interest. Another option is to sell part of your company to investors. Those investors give the business money in exchange for owning a small piece of it.x

Instead of owing those investors money like you would with a loan, they become partial owners of the business. If the company becomes more successful and valuable over time, their piece of the company could become more valuable too.

This is one of the main ideas behind the stock market.

Most businesses don’t start out selling shares to anyone who wants them. They begin as private companies, meaning their ownership is held by a smaller group of founders, employees, or private investors. But as a company grows, it may eventually decide that it wants access to much larger amounts of money.

When a private company becomes publicly traded, it can sell shares to the public through a process called an initial public offering, or IPO. The SEC describes an IPO as the first time a company offers its shares to the general public. The money raised can give the company additional capital to expand and invest in new projects, pay down debt, or pursue other goals.

And companies are still using this system today. According to the SEC, there were 376 IPOs in 2025. In the first quarter of 2026 alone, there were 99 IPOs that raised more than $22 billion. That means billions of dollars were being raised by companies through public markets in just three months.

But here’s where it gets interesting.

Once a company goes public, its stock can be bought and sold by investors. The company doesn’t receive money every time you buy a share from another investor. If you buy a share of a public company from someone else, your money goes to that seller. The company originally receives money when it sells shares to investors, such as during an IPO or another offering.

So why does the company care about its stock price after that?

Its stock still represents the market’s view of what the company is worth. A strong stock price can also be useful if a company wants to raise additional money by issuing more shares, compensate employees using stock, or even use its shares as part of a deal to acquire another company.

So while the company isn’t collecting money from every trade, what happens to its stock can still have a major effect on the business.

This is what makes the stock market more interesting than it first appears. On the surface, it looks like people are simply buying and selling numbers on a screen. Underneath all of that, though, the shares represent real pieces of real businesses.

Companies need money to grow. Investors are willing to provide that money because they believe the businesses they invest in could become more valuable over time. The stock market bridges those two sides.

And once those shares start trading between millions of investors, an even more interesting question takes shape. Who decides what one of those shares is actually worth? We’ll dive into that question in our next economics post.