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PPLNS with job declaration

PPLNS with job declaration

Original Postby marathon-gary

Posted on: September 6, 2024 14:51 UTC

When exploring the mechanisms through which individuals or entities can acquire shares they did not originally create, several key processes come into play.

One primary method is through the secondary stock market, where stocks are bought and sold among investors after the initial public offering (IPO). This trading does not involve the issuing company directly but allows shareholders to sell their shares to other parties. Another avenue is through stock options, which are often provided to employees as part of compensation packages. These options give the employee the right, but not the obligation, to purchase company stock at a predetermined price after a specific period, known as vesting.

Additionally, dividend reinvestment plans (DRIPs) enable shareholders to use dividends received from their investments to purchase additional shares, often without commission. This method effectively allows investors to increase their shareholding without making an additional direct investment. Acquisition of shares can also occur through inheritance, where shares are transferred to heirs as part of an estate. Moreover, companies sometimes engage in stock splits or bonus issues, which can alter an investor's shareholding without a direct purchase. In a stock split, the company increases the number of shares owned by investors by dividing each existing share into multiple ones, while in a bonus issue, additional shares are distributed to current shareholders without any cost based on the number of shares already held.

These methods collectively illustrate the diverse ways through which shares not initially created by an individual can be acquired, each with unique implications for the shareholder and the underlying company.