What is a stocks par value?

A stocks par value is the initial price that a stock was offered at. The issuing company promises during the initial offering not to sell the stock at any price below par value. This ensures investors that no one is getting a sweetened deal on the initial stock offering. Many common stocks that are issued today have no par value assigned or the par value is very minimal, such as pennies. Par value is also used in the company bookkeeping practices.

Getting a stock at par value is the best price a shareholder can hope to obtain a share at as the company promises not to issue shares lower than this price. Par stock is also used when companies are doing their monthly or annual books as it lets them assign a minimum value for the stock. Under par stocks means stocks below the minimum value and over par means over the minimum value.