common stock

noun

Definition of common stock

: stock other than preferred stock

Examples of common stock in a Sentence

Recent Examples on the Web

The international higher education company said 15 million shares of Class A common stock will be part of the underwritten secondary offering by Wengen Alberta Limited Partnership. Baltimore Sun Staff, baltimoresun.com, "Laureate Education announces public offering by controlling stockholder," 9 Sep. 2019 Stock classes In an unconventional move, there will be three classes of common stock at WeWork: Holders of Class A shares will have one vote per share while Class B and Class C holders will have 20 votes per share. Los Angeles Times, "WeWork chases high-risk path toward ultimate unicorn IPO," 14 Aug. 2019 For large corporations, the capital stack typically consists of senior debt, followed by subordinated debt, followed by hybrid securities, followed by preferred equity (preferred stock) and last, common equity (common stock). Gary Miller, The Denver Post, "Gary Miller: Know what capital structure is and how to use it to grow your business," 7 Aug. 2019 As of Monday, the date of the NYSE notice, the 30 trading-day average closing price of Pioneer Energy Services common stock was $0.89 per share. Marissa Luck, Houston Chronicle, "Camber Energy regains stock compliance; Pioneer Energy warned of delisting," 12 June 2019 WeWork’s IPO will have three classes of common stock: Class A shares have one vote each. Ellen Florian, Fortune, "“A Mess Any Way You Look at It”: 5 of the Weirdest Things in the WeWork IPO Filing," 15 Aug. 2019 For small corporations and pass through entities (LLCs, S-corps etc.), the capital stack is as simple as owners’ common stock/membership interests and senior debt from their local bank. Gary Miller, The Denver Post, "Gary Miller: Know what capital structure is and how to use it to grow your business," 7 Aug. 2019 The company's common stock ceased trading and was delisted from the New York Stock Exchange. Katherine Feser, Houston Chronicle, "Capital markets powerhouse HFF now part of JLL following merger," 1 July 2019 Vail, which runs 17 mountain resorts and three urban ski areas, will acquire all outstanding shares of Peak’s common stock for $11 each in cash, a 116% premium to Peak’s closing price on Friday. Lorraine Mirabella, baltimoresun.com, "Vail Resorts will acquire owner of 17 ski resorts, including three closest to Baltimore, for $264 million," 22 July 2019

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

Last Updated

23 Sep 2019

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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

noun

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

Britannica.com: Encyclopedia article about common stock

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