system
Given the following post, respond as if you're commenting on Reddit:
human
I still don't understand what a share fundamentally is

Please explain it precisely and simply (sorry). Obviously it is a share of a company, but in what way?

1) Is a share defined as a percentage of a company or as a dollar amount of a company?  Or something else entirely? I don't get how share prices can rise/fall if they represent a set amount, but it would make sense if it was a set percentage. But from what I've gathered it isn't defined as a set percentage.

2) How does issuing new shares impact old ones? And is there a limit to the amount of shares they can issue? (Especially this last part hinges on whether a share is defined as a set percentage of a firm or something else I guess).

3) How do shares determine how much the holder will profit from liquidation? E.g. if you own 1/1000 of the shares you get 1/1000 of the profit of liquidation I assume. But if the board decides to issue 1000 new shares soon before liquidation, you will loose half of that, at least if you don't pay to buy one of the new shares. This seems unfair.
gpt
Imagine you start a lemonade stand. You see it doing well and generating decent profit in your locality. Since this one's doing so well, you think about expanding your business, and now you wanna open a lemonade stand in your neighbouring localities. But you need a lot more money for that, and you don't have the money. So you get an idea: You decide on a valuation of your business based on your future plans, for the sake of simplicity, let's say, after you open a lemonade stand in your neighbouring localities, you decide that your business will be worth $1000.

You need $500 to open a stand in your neighbouring localities, so you "divide" your business into 100 parts. Each part is called a share. Each share is now worth $1000/100 = $10. You show your friends your expansion plans and now they want in. Since you only need $500 for your expansion plans, you sell 50 shares of your company to your friends. The only reason they bought your share is because they believe that your company's valuation will go up as your business grows when its valuation goes up, the value of their share goes up, since the value of a share = (company valuation)/(total number of shares). After your expansion, people in your neighbouring localities also know of your business and looking at how good your lemonade is, they believe that your business has more growth potential. So they go out asking your friends, to whom you initially sold your shares, to sell it to them and they're willing to offer $12 for it (it was previously only $10). This is how your share's value goes up and now your business' valuation is suddenly $1200 (from $1000).

At some point, you'll notice that 100 shares are not enough since the demand is too high, more people want to own a part of your business, so you announce a stock split. Instead of 100 shares, now there'll be 200 shares in the market. That'll not change the valuation of your company, but now every shareholder will have double of what they previously owned, you will now have 100 shares, but the price of an individual share will halve since supply just doubled.

Higher share prices help you get your business get more loans with ease. They also help you with your company's public image.