What is the difference between shares, stock and stakes? For a layman, many times it seems they are used almost interchangeably.
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2 Answers
Shares are the individual units of ownership of a company. The total number of shares of a company is somewhat arbitrary and can be changed by splits. A company worth $1 billion might be divided into 10 million shares worth $100 each, or 100 million shares worth $10 each. Professional trading is typically done in "lots" of 100 shares; individuals can own as little as 1 share or in some cases even fractional shares.
Stock is the general term for the instrument of partial ownership of a company. An amount of stock is measured in shares, just as an amount of money is measured in dollars or euros or whatever. "A stock" is the stock of a particular company. If you own 100 shares of Microsoft, you don't own 100 stocks; you own 100 shares of 1 stock. However, by metonymy, "stock" and "share" are sometimes used interchangeably in general terms. For example, "stockholder" and "shareholder" mean the same thing. And what Americans call "stock market" and "stock trading", others may call "share market" and "share trading".
Stake also refers to partial ownership of a company, but measured as a fraction of the entire company. For example, if someone owns a 10% stake in Microsoft, it means they own 10% of all outstanding shares.
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2"Stock" as a noun means "company" or "company ownership", from the perspective of a financial investment. A share can't be several stocks because each share is a fraction of a (single) company. Commented Apr 8, 2021 at 16:24
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1Easiest to say that the word "stock" colloquially refers to an amount of shares owned. I feel like the word "stock" is mostly used outside the finance world, whereas tradesmen more often prefer the terms "security" or "equity position" (or more commonly, simply "position") which are less ambiguous. If you dropped the word "stock" from your vocabulary, you wouldn't be worse off. Commented Apr 8, 2021 at 16:44
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2I believe "stake" is a rather informal term (unlike "share" and "stock") that could refer to percentage ownership, but also potentially to simply having some less direct business interest in a company. Although one wouldn't expect the latter to be represented as a percentage. Commented Apr 9, 2021 at 12:02
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1@jpaugh "Except that neither security nor position unambiguously refer to the field of finance." Well, neither does stock. Your point about context and understanding is still valid, but the assertion that "stock" is unambiguously a financial term muddies the waters. Commented Apr 9, 2021 at 23:29
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1@Clockwork: You can own shares of lots of things: stocks, ETFs, etc. Commented Apr 10, 2021 at 7:23
Stakes - Stake represents thе percentage оf stock thаt аn individual own. A person саn hаvе a stake in a company аlthоugh hе dоеѕ nоt оwn shares оf itѕ stock. Suppose, a company iѕ lооking tо raise 50,000 dollar in exchange fоr a 20% stake in itѕ business. Investing 50,000 dollar in thаt company соuld entitle уоu tо 20% оf thаt business's profits gоing forward.
Shares - Whеn a company issues stock, еасh unit оf stock iѕ measured аѕ share. Onе share оf stock iѕ equal tо оnе unit оf ownership in thе company. Shares generally refers tо units оf stock in a public company. A shareholder holds раrt оf a company thrоugh stock ownership, whеrеаѕ a stakeholder iѕ interested in thе performance оf a company fоr reasons excluding juѕt stock appreciation.
