common stock


Definition of common stock

: stock other than preferred stock

Examples of common stock in a Sentence

Recent Examples on the Web

Moelis, which is advising some holders of Fannie and Freddie’s preferred shares, estimates the government could make up to $125 billion through the sale of its warrants for the companies’ common stock. Andrew Ackerman, WSJ, "Popular Hedge Fund Bet on Fannie and Freddie Is Paying Off Big This Year," 26 Jan. 2019 The startup converted its preferred shares to common stock to align interests of all shareholders. Tomio Geron, WSJ, "Ditch the Venture Model, Say Founders Who Buy Out Early Investors to Make a Clear Break," 17 July 2018 In the first nine months of 2018, the company used $9.39 billion to buy back 54 million shares of its class A common stock, according to its quarterly filing with the Securities and Exchange Commission on Oct. 31. Patrick Thomas, WSJ, "Facebook Expands Share Buybacks," 7 Dec. 2018 Elliott is a major shareholder, owning about 8.6% of the carrier’s common stock and some $336 million in preferred shares Roadrunner sold the hedge fund over the past 16 months to help pay down debt and fund operations. Jennifer Smith, WSJ, "Trucker Roadrunner Seeks to Pay Off Costly Rescue Funding," 14 Sep. 2018 VMware will remain a standalone company, and Dell will continue to own 81% of VMware’s common stock. Bloomberg,, "Dell stock will trade publicly again, five years after leveraged buyout," 3 July 2018 Musk, 47, has already pledged some of his shares of Tesla’s common stock to secure bank borrowings, according to a June 2018 filing. Tom Metcalf, The Seattle Times, "Elon Musk needs just 61 characters to lift wealth by $900 million," 7 Aug. 2018 The bankruptcy deals a blow to former Bon-Ton chairman and CEO Tim Grumbacher, who still owns 21% of the company's common stock, according to court records. Nathan Bomey, USA TODAY, "Bon-Ton Stores files Chapter 11 bankruptcy as department stores reel," 5 Feb. 2018 Cohu will pay Xcerra shareholders $9 a share in cash and 0.2109 of Cohu common stock for each share, the companies said in joint news release Tuesday. Wsj Staff, WSJ, "Cohu Bags Rival U.S. Chip Tester Xcerra After Chinese Deal Thwarted," 8 May 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'common stock.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of common stock

1784, in the meaning defined above

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Statistics for common stock

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Time Traveler for common stock

The first known use of common stock was in 1784

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More Definitions for common stock

common stock


Financial Definition of common stock

What It Is

Common stock represents ownership interests in corporations.

How It Works

The most prominent characteristics of common stock are that they entitle the shareholder to vote on corporate matters (typically, the shareholder gets one vote for every share he or she owns, though that is not always the case) such as whether the company should acquire another company, who the board members should be and other big decisions. Common stock also often comes with preemptive rights, which means the shareholder has a "right of first refusal," or first dibs on buying any new stock the company tries to issue.

Perhaps the most important attribute of common stock is that their holders are the last in line when it comes to getting their money back. If the company goes bankrupt and has to sell off its assets, the cash from the asset sale first goes to lenders, employees and lawyers. The shareholders get whatever is left (which is usually nothing, or just a few pennies for every dollar they originally invested).

Why It Matters

If you own one, 100 or 100 million shares of stock in a company, you're an owner of the company. There are different kinds of stocks, and their classifications largely depend on the rights they confer on the holder. Investors evaluate these categories based on their investment objectives, and they look for stocks that meet those objectives. The two most popular categories of stock are common stock and preferred stock.

Although preferred stock owners don't usually get any voting rights, they usually receive a steady dividend and their claim to the company's assets "outrank" the common stockholders' claims (i.e., in the event of bankruptcy, the company must pay off lenders, preferred shareholders, employees and lawyers before the common shareholders get anything).

Source: Investing Answers

common stock

Legal Definition of common stock

see stock

More from Merriam-Webster on common stock

Rhyming Dictionary: Words that rhyme with common stock Encyclopedia article about common stock

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