Different types of shares
Did you know that there are different kinds of shares? Common stocks are, well, they’re common. When people talk about shares, they usually refer to this type. In fact, the majority of shares are issued in this form. Ordinary shares represent ownership in a company and a claim (dividend) to a share of the profits. Investors get one vote per share to elect directors, who oversee the major decisions made by management. Over the long term, through capital growth, ordinary shares provide higher returns than almost any other investment. This higher return comes at a cost because common stock carries the most risk. If a company goes bankrupt and liquidates, the common shareholders will not receive money until the creditors, bondholders and preferred shareholders are paid.
Preference shares
Preference shares represent a certain degree of ownership in a company but usually don’t come with the same voting rights. (This can vary by company.) With preference shares, investors are usually guaranteed a fixed dividend forever. This is different than common stock, which has variable dividends that are never guaranteed. Another advantage is that in the event of liquidation, preference shareholders are paid off before the ordinary shareholder (but still after debt holders). Preference shares can also be marketable, meaning the company has the option to buy the shares from shareholders at any time for any reason (usually for a premium). Some people consider preference shares to be more like debt than equity. A good way to think about these types of shares is to see them as between bonds and ordinary shares.
Different share classes
Ordinary shares and preference shares are the two main forms of shares; but it is also possible for companies to customize different classes of shares in any way they want. The most common reason for this is that the company wants the voting rights to remain with a particular group; therefore different classes of shares are given different voting rights. For example, one class of shares would be held by a select group who are given ten votes per share while a second class of shares would be issued to the majority of investors who are given one vote per share. When there is more than one class of shares, the classes are traditionally referred to as Class A and Class B. Investor has two classes of shares. The different forms are represented by placing the letter behind the ticker symbol in a form like this: “INVE A and INVE B”.
About the Vikingen
With Vikingen’s signals, you have a good chance of finding the winners and selling in time. There are many securities. With Vikingen’s autopilots or tables, you can sort out the most interesting ETFs, stocks, options, warrants, funds, and so on. Vikingen is one of Sweden’s oldest equity research programs.
Click here to see what Vikingen offers: Detailed comparison – Stock market program for those who want to get even richer (vikingen.se)
