Ordinary shares...please help

Supernube

I am sorry for what I already know is a stupid question but I just cant find a clear answer online.
I was left some ordinary 10p shares by my father...which I am about to sell...Tullow Oil shares.
Im just a little confused by the whole ordinary 10p share thing....How can I buy ordinary 10p shares ?
In which companies ?
Im asking because somebody has suggested that all companies offer ordinary 10p shares...which I could buy tomorrow and then sell for the market price the next day ?? surely this is not right...?
In other words for example..can I buy Tesco ordinary 10p shares tomorrow...then sell them for what ever price they are listed for on the markets ?
Im sorry again for asking what MUST be such a stupid question...and for no doubt using the wrong terminology lol...but please advise me
Thank you
Daniel

Vortigern

10p may be the nominal value of the shares but it's not the market price.
Google "Nominal Value of Shares" for more info.
If you want to buy Tesco ordinary 10p shares tomorrow they'll cost about £3.52 each - and your Tullow are about £11.95 each

Supernube

Thank you very much.
Is this the same as "penny shares" are they actually 1p per share ? or is this again the nominal value ?
Im trying to find out how to buy cheap shares in the hope they will greatly go up in price at some point......Im just thinking about reinvesting the money I will make from the Tullow Oil shares thats all...and the odd investment here and there with my fingers crossed :-)
Please advise
Thank you
Daniel

jamiex

Shares that have a very low market value (under £1? - I'm not sure) are generally referred to as 'Penny shares'.

This has nothing to do with the 'nominal value' of the shares, just the market value.

The market value is all you should be interested in as that's what the shares are worth.

R_P_W

I think everyone wants to buy 'cheap' shares that will greatly go up in price so they can sell and profit!!!

The fact that some shares are described as penny shares doesnt mean they are more likely to go up in price than shares that are £15 each.

pyueck

Ok quick account lesson. When shares are issued the nominal value of the shares is shown on the balance sheet as share capital. Anything paid above this when shares are issued goes into the share premium account.

The basic idea is that a company can not pay out in dividends more than they have made in accumulated profit to shareholders. In certain instances, i won't go into, amounts in the share premium accounts may be returned to shareholders. The rules around here are meant to provide some protection to creditors, to stop companies paying all assets out in the form of dividends should they know the company is in trouble, and then leave all the creditors with nothing on liquidation. The only way share capital can be returned to shareholders is on liquidation of the company.

From an investors point of view, the only impact of the nominal amount, is that it shows what part of a companies balance sheet cannot be paid to you as dividends. In reality, don't worry about it. And no you cannot buy shares at their nominal value, once shares have been issued, you are buying on what is known as the secondary market, and the price you paid is determined by the market. If you take part in an IPO or a rights issue any amount paid over the nominal amount will be held in the share premium account.