The stock market is like a sophisticated capital machine, turning an ordinary milk tea shop into a listed company worth one billion. What kind of financial logic is hidden behind this? Who is determining the rise and fall of the stock price? What do investors really need to pay attention to?

Suppose you sell milk tea at a night market, and with the exclusive recipe, there are always long queues in front of your stall. Half a year later, you saved enough money to open your first store, so you borrowed money from your relatives and friends to open the first store of "Xiao A Milk Tea".

The business is booming and the loan is paid off soon. With the check-in by bloggers of Douyin and Xiaohongshu, your milk tea shop has become an internet celebrity store.

Capital knocks on the door, from angel investment to venture capital

When you want to open a branch, you can no longer support it. At this moment, you pushed open the door to capital.

Ange investors are optimistic about your potential and invest millions of yuan in exchange for company equity. This is not a loan, it does not require interest, nor does it require repayment, they want part of the ownership of the company.

With this fund, you have opened many branches in Hangzhou, Shaoxing and other places, established a brand marketing department, and Xiao A milk tea has become a chain brand.

But when your goal is expanded to 10,000 stores across the country, you need to build a national supply chain system - raw material base, central kitchen, cold chain logistics, warehousing and distribution, etc., which requires hundreds of millions of yuan.

Visit investment institutions have emerged. They are willing to provide 100 million yuan in funds, but require more shares and betting agreements: 3,000 stores must be opened within three years, with annual revenue exceeding 5 billion yuan, otherwise shares will be repurchased or the difference will be compensated.

The road to listing, from private companies to public companies

Capitals have never been philanthropists, and they look forward to exiting at the right time to make a profit. At this time, a large catering consortium proposed a merger and acquisition plan, willing to use real money to acquire the controlling stake in Xiao A Milk Tea.

You are facing the choice: accept the merger and acquisition, get huge funds immediately, but lose control of the company; or insist on going public and maintain control, but you need to go through complex audits and capital market tests.

You chose to go public. With stable revenue growth and profit records for three consecutive years, healthy cash flow, transparent financially and corporate governance meets standards, you decided to submit an IPO application on the Kojima Stock Exchange.

Helping an investment bank as the sponsor, submit a prospectus, and detailed disclosure of business plans, financial data, risk warnings and future plans. After the exchange review, Xiao A Milk Tea was successfully listed.

Primary and secondary markets, completely different rules of the game

The listing process is essentially a capital increase and share expansion. The company issued new shares to public investors, and the proportion of the original shareholders' shares was diluted, but the shares in their hands increased significantly due to the increase in valuation.

Xiao A Milk Tea issued 100 million shares during its IPO, with 10 yuan per share, and the company received 10 billion yuan of funds, which is financing in the primary market.

After the stock is listed and traded, investors buy and sell stocks to each other, the company itself cannot get money. When someone buys stocks for twelve yuan, the money is given to the shareholders who sell the stocks, not Xiao A Milk Tea Company.

The secondary market is like a huge second-hand market. Investors do not have to hold stocks for a long time. It is this liquidity that makes stocks a popular investment vehicle.

The mystery of stock price, supply and demand relationship determines everything

Who decides the stock price? The answer isSupply and Demand Relations.

There are many people buying, and everyone is rushing to buy at a high price, and the stock price rises; there are many people selling, and the selling pressure is greater than buying, and the stock price falls. Business owners cannot directly determine the stock price, and exchanges cannot control the price. What really drives the price is the buying and selling behavior of all investors.

Why is the stock price fluctuating so much? Imagine that the secondary market is a fritters market: some people think that the company is more valuable in the future and are willing to buy it for fifteen yuan; some people think that the risk is too great and just want to get out of it as soon as possible for eight yuan.

When there are more optimistic than pessimists and are willing to raise prices to grab goods, the price will be pushed up; when pessimists dominate and sell prices, the price will be smashed down.

Influencing factors, diverse and complex market sentiment

What drives investor sentiment is various information: Corporate profitability - After Xiao A Milk Tea announced its performance, the daily sales of a single store rose from 400 cups to 800 cups, and the profit margin was higher than those of the peers. Investors bought wildly, and the stock price rose;

Industry popularity—The new tea beverage track is booming, the industry's retail scale has moved from 100 billion to 100 billion, the market expects high growth, and the stock price has been raised;

Funding sentiment—In the bull market, everyone thinks that Xiao A Milk Tea will open 10,000 stores, and chase highs in a crazy way; in the bear market, even if the company continues to make profits, it may be suppressed by market sentiment;

Policy News—The introduction of regulations on restricting sugary beverages or a branch exposed food safety issues, investors panic, and the stock price plunged; encourage tea beverage companies to go overseas or tax cuts, and the market imagines Xiao A milk tea replicated the story of the city value soaring, and the stock price soared;

Institutional investors-large funds bought hundreds of millions of funds, and the stock price immediately pushed up; concentrated share reductions brought about a waterfall-like decline.

Stock price is a projection of expectations, and the market uses today's price to reflect future imagination and concerns. Stock prices will only rise and fall when supply and demand are unbalanced.

More people want to buy and are willing to pay higher prices, but the sellers are limited, and the price is pushed up; more people are in a hurry to sell and the sell orders increase, but the buying orders are insufficient, and the price falls all the way.

Investment core, the combination of cognition, patience and timing

What is the most important thing in stock trading? Cognition plus patience plus timing.

The quality of a company is important, but the timing is even more important. If an excellent company enters at a high valuation point, it may not see any profit in a few years; if it is laid out when the market is deserted, a bull market can reap generous returns.

From historical data, the market is at a volatile low for 80% of the time, and obtaining more and lower-cost chips at a long low can achieve wealth growth in the 20% surge period.

Mentality is crucial. Rising and falling are normal phenomena in the market. You may want to maintain a calm mind when you are anxious. The experience of the 92-year-old stock investor is:"It is normal to rise and fall, and you can get up from wherever you fall."

Market differences, different rules for game venues

After the company goes public, the stock price is mainly determined by the supply and demand relationship and fluctuates continuously. But different markets have different rules: some market value investment leads, and value dividends and profits; some market retail investors are mostly, and their emotions fluctuate more;

Some market supervision is strict; some market supervision is loose and speculative behavior is more frequent.

But in any case, the market will always reward the few people who can understand logic and control their hands. Understanding the market operation mechanism, seizing investment opportunities, and maintaining a good attitude are the key to long-term survival in the stock market.

The stock market is not a casino, but a place for capital allocation. It guides capital to the most efficient places through price mechanisms. Understanding the operating logic of the stock market will not only help investment decisions, but also allow us to understand the secrets of the operation of the modern economy.

From a cup of milk tea to a listed company, the power of capital can be seen. But in the end, the market rewards companies that truly create value and smart investors.

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