What is a share? Ownership, dividends and price explained

What is a share?

A share is a small piece of ownership in a company. When you buy one, you become a part-owner of that business – usually a very small part.

What you actually own

A company divides its ownership into many equal pieces called shares (also called stocks). If a company has 1,000,000 shares and you own 10, you own 10 ÷ 1,000,000 = 0.001% of it.

As a part-owner, you share in the company's results, good or bad. You do not run the company, and you do not own its buildings or bank accounts directly. Depending on the share, you may get a vote at the annual meeting.

Two ways a share can pay you

A share can make money for you in two ways. The first is a rise in its price: if you buy at €20 and later sell at €23, you gain €3 per share before costs. The second is a dividend, which is a part of the profit the company chooses to pay out to its owners.

Dividends are not promised. A company can raise, cut or stop them, and many companies pay none at all because they reinvest their profits in the business. How dividends and gains are taxed depends on your country – see the country rules.

Why share prices move

When shares are listed on a stock exchange, their price is set by buyers and sellers, many times a day. The price rises when more people want to buy than sell at the current price, and falls when the opposite happens.

Buyers and sellers react to company results, news, interest rates and general mood. Over a few days or months, prices can move a lot for reasons that have little to do with the business itself.

A small worked example

Say you buy 10 shares at €20 each, so you pay €200 (ignoring fees). Here is what different outcomes look like:

The price rises to €23: your shares are worth 10 × €23 = €230, a gain of €30.
The price falls to €15: your shares are worth 10 × €15 = €150, a loss of €50 if you sell.
The company pays a dividend of €0.50 per share: you receive 10 × €0.50 = €5.
The company goes bankrupt: your shares can become worth €0, and you lose the full €200.

A company can fail

The last line in the example can really happen. Businesses can shrink, lose money for years or go bankrupt, and their shares can lose all their value. The most you can lose on a share you bought outright is what you paid for it.

This is why owning just one or two companies is risky. Spreading your money across many companies is covered in risk and diversification, and funds that hold many shares at once are covered in what is an ETF?

Key takeaways

A share is a small piece of ownership in a company.
You can gain from a higher price or from dividends, but neither is guaranteed.
A single company can fail, so its shares can fall to zero.

Try it

Enter the €200 from the example and an assumed yearly return (5% here is only an assumption, not a forecast) to see how growth adds up over time.

See how €200 could grow

Quick check

3 questions. Pick an answer to see why it's right or wrong.

If a company has 1,000,000 shares and you own 10, how much of the company do you own?
Show the answer
0.001% – If a company has 1,000,000 shares and you own 10, you own 10 ÷ 1,000,000 = 0.001% of it.
Does owning a share guarantee you a dividend?
Show the answer
No, a company can raise, cut or stop dividends – A company can raise, cut or stop them, and many companies pay none at all because they reinvest their profits in the business.
You buy 10 shares at €20 and the company goes bankrupt. What is the most you can lose?
Show the answer
€200, the full amount you paid – The most you can lose on a share you bought outright is what you paid for it.

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Last reviewed 25 Oct 2026

Education, not advice. I'm not a financial adviser and I don't know your situation. These tools show the maths behind common rules of thumb; check important decisions with a qualified professional. Full disclaimer.