Cheap stock generally refers to the initial or first shares of stock issued in a company. The value of the stock is often relatively cheap because the company is just starting and has not built up or developed significant value. As the company itself grows and becomes more valuable, the stock will likewise become more valuable. Stock issued after the company becomes more valuable will generally have a higher value placed on it by its directors. The stock value in a small private company is closely related to the company’s value, which fluctuates depending on the business.