What Are “Apps Stock” and How Do They Work?
We use apps on our phones every single day. You might use Facebook to talk to friends, WhatsApp to send messages, or Candy Crush to play games. These are all apps.
But did you know you can own a tiny piece of the companies that make these apps? This is called buying “apps stock.” When you buy stock, you become a small owner of that company. If the company makes money, your stock might be worth more.
This guide will explain what apps stock is, why people buy it, and how to stay safe.
What Is a Stock?
Imagine a big pizza. The whole pizza is a company. The company cuts the pizza into millions of tiny slices. Each slice is called a “share” or a “stock.”
If you buy one slice, you own a part of that pizza.
- Buying: You pay money to get a slice.
- Selling: You give the slice back to someone else for money.
- People buy stocks because they hope the price of the slice will go up. If you buy a slice for $5 today, and next year it is worth $10, you made money.
Why Do People Buy App Stocks?
App companies are very popular right now. Think about how much you use your phone. Almost everyone has a smartphone. This means companies that make apps have a lot of customers.
Here are three reasons people like apps stock:
1. Everyone Uses Apps
We use apps for banking, shopping, dating, and watching videos. Because so many people use them, these companies can make a lot of money. When a company makes money, the price of its stock usually goes up.
2. They Can Grow Fast
A factory takes a long time to build. But an app can reach millions of people in just a few days. If a new game becomes popular, the company can grow very fast. This can make the stock price jump up quickly.
3. You Can Start Small
You do not need thousands of dollars to start. Some apps let you buy stock for just $5 or $10.
Examples of Famous App Companies
You probably know many of these companies already. You can buy stock in them.
- Meta (Facebook & Instagram): They make money by showing ads to you while you scroll.
- Snap (Snapchat): Popular with younger people for sending photos.
- Uber: The app you use to get a ride or order food.
- Netflix: The app you use to watch movies.
When you buy stock in these companies, you are betting that they will keep doing well in the future.
How to Buy Your First Stock
Buying stock used to be hard. You had to call a person in a suit and pay them a lot of money. Now, it is as easy as ordering a pizza.
Step 1: Get an Investing App
Ironically, you use an app to buy stock in other apps! These are called “brokerage apps.” Some popular ones are Robinhood, Cash App, or Fidelity. You download them from your phone store.
Step 2: Sign Up
You will need to give them your name and some personal details. This is to keep your money safe. You also connect your bank account so you can move money into the app.
Step 3: Pick a Company
Search for the name of the company you like. If you like Snapchat, type “Snap” into the search bar.
Step 4: Buy a Slice
Enter how much money you want to spend. It could be $5. Then, press the “Buy” button. Congratulations! You now own apps stock.
Be Careful: The Risks
Investing is not a way to get rich quick. You can lose money too. It is important to understand the dangers.
Prices Go Down
Just like prices can go up, they can go down. If you buy a stock for $10, it might drop to $5 the next day. If you sell it then, you lost $5.
Trends Change
Do you remember old apps that nobody uses anymore? If you owned stock in a company that became unpopular, you would lose money. The app world changes very fast. What is cool today might be boring tomorrow.
Don’t Put All Your Eggs in One Basket
This is an old saying, but it is true for stocks. Do not put all your money into just one app company. If that one company fails, you lose everything.
Ideally, you should buy small pieces of many different companies. Maybe buy a little bit of a social media app, a little bit of a shopping app, and a little bit of a bank app. This makes it safer.
Tips for Beginners
If you want to try buying apps stock, follow these simple rules:
- Only spend money you can afford to lose. Do not use money you need for rent or food.
- Think long-term. Do not try to double your money in one week. Think about keeping the stock for years.
- Learn as you go. Watch the news about the companies you own. If people stop using the app, it might be time to sell.
Conclusion
“Apps stock” just means owning a small piece of the companies that build the apps on your phone. Because we use phones so much, these companies can be good investments.
It is easy to start with just a few dollars using an investing app. But remember, the value can go down as well as up. Start small, be safe, and only invest what you don’t need for your daily bills.
