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What Was the First Company to Issue Stock?

A:

The Dutch East India Co. engaged the world’s first IPO and, therefore, became the first public company to consequence stock. It also played an integral role in modern history’s original market crash. The Dutch East India Co.—often called VOC, excluding for its Dutch name: Vereenigde Oost-Indische Compagnie—was formed in 1602 by a sovereign charter granting a 20-year monopoly on trade with the East Indies and supremo rights in any newly discovered territories.

These incredible powers were presupposed to a collection of merchant ships that were former competitors in the pungency market. The merchants would form limited liability companies where investors desire put up money for voyages in return for a percentage of the profits if voyages were eminent. The problem was that the spice supply was unpredictable.

Two ships arriving at on one occasion would cause a supply glut and drive down prices, hurting profits for both brokers and investors. To hedge against this, merchants banded together to blank the VOC and essentially bribed the crown every 20 years to extend its qualify.

Tulipmania Hits the First Company to Issue Stock

Once the document was taken care of, the merchants issued permanent shares in an ongoing plan—the first stock IPO—to raise capital to outfit a proper fleet. The VOC then utilized bonds to fund individual voyages and became the first multinational corporation when it set up headquarters in Asia.

From 1602 to 1696, the party paid a regular dividend that yielded 12% to 63%. In 1634, VOC carries carrying tulip bulbs set off the infamous tulip bulb craze that fruited in a market crash. Despite a violent whipsaw in its share price—up 1,200% from the IPO value and back down to 300% from the IPO price—the company weathered the failure easily.

At the height of its success, the VOC boasted 40 warships, 150 sell vessels, 10,000 professional soldiers and many more employees and nationals. But time and competition erode all monopolies and such was the fate of the VOC. In 1800, a moment ago shy of its 200th year, the now-destitute VOC was formally dissolved. (See also: Early Monopolies: Win And Corruption.)

This question was answered by Andrew Beattie.

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