text: The purpose of the stock exchange is simple to facilitate trading of shares from sellers to buyers.  The process of putting a company stock on the stock exchange (through an IPO), that's the company raising capital by offering shares to the public.  The theory of course is that the company can then use the capital to further grow the business and become even more profitable in the future.  \n\nAs for mergers.  The idea is that two like minded companies join forces to be bigger and better at what they do.  This will generage more income.  At the same time, combining forces can save money on duplicated work.  \n\nHope this helps.