Can the fund/person/company demand that the fossil fuel company gives them their money back? Basically, how can divestment ultimately work if we’re trying to get *everyone* to divest…?
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the price drops, and as long as fossil fuel is the cheapest source of energy there is a few billion billion people that are too poor to give one damn about rich people thinking fossil fuel are bad
So this isn’t a question about fossil fuels, this is purely a question about trading stocks.
All stock trades need a buy and a seller and they agree on a price to exchange shares at. When you see a stock price of a company, all that is is the last price an exchange between a buyer and seller was made at.
If you want to sell shares, a buyer wants to buy it as low as possible. So lets say you try to sell it at $100, no takers, lower it to $99, and maybe someone is buying there. And so on. If no one is buying, in theory the stock can go to zero, although there are lots of cavets here that are way beyond the scope of the question.
If there are no buyers for stock, for whatever reason, the stock could go to zero, although the company still has assets (like money, factories, trucks, etc), so until it doesn’t have anything of value, the stock is still technically something not zero. When a company has a zero price stock or very low price, some much more complicated stuff starts happening, such as the company going out of business but selling off their assets (like say buildings, trucks, etc.) and giving their shareholders whatever they can from those sales. At that point as well, the stock may no longer be traded on the public markets anyways, which is called “delisting”, and happens when a company is going out of business, you can’t trade its stock anymore.
So this isn’t a question about fossil fuels, this is purely a question about trading stocks.
All stock trades need a buy and a seller and they agree on a price to exchange shares at. When you see a stock price of a company, all that is is the last price an exchange between a buyer and seller was made at.
If you want to sell shares, a buyer wants to buy it as low as possible. So lets say you try to sell it at $100, no takers, lower it to $99, and maybe someone is buying there. And so on. If no one is buying, in theory the stock can go to zero, although there are lots of cavets here that are way beyond the scope of the question.
If there are no buyers for stock, for whatever reason, the stock could go to zero, although the company still has assets (like money, factories, trucks, etc), so until it doesn’t have anything of value, the stock is still technically something not zero. When a company has a zero price stock or very low price, some much more complicated stuff starts happening, such as the company going out of business but selling off their assets (like say buildings, trucks, etc.) and giving their shareholders whatever they can from those sales. At that point as well, the stock may no longer be traded on the public markets anyways, which is called “delisting”, and happens when a company is going out of business, you can’t trade its stock anymore.
short answer? the stock price drops until SOMEONE buys it….or the company goes bust and the stock is worthless….sometimes both.
you cant *force* the company to buy your stock back off you, no. You bought into the company and its future, you ride the highs AND the lows.
If the company goes bust, your suppose to receive a cut of whats left after liquidation, equal to your share of the company, but whatever that is will be much less than what you paid for it..
the price drops, and as long as fossil fuel is the cheapest source of energy there is a few billion billion people that are too poor to give one damn about rich people thinking fossil fuel are bad
So this isn’t a question about fossil fuels, this is purely a question about trading stocks.
All stock trades need a buy and a seller and they agree on a price to exchange shares at. When you see a stock price of a company, all that is is the last price an exchange between a buyer and seller was made at.
If you want to sell shares, a buyer wants to buy it as low as possible. So lets say you try to sell it at $100, no takers, lower it to $99, and maybe someone is buying there. And so on. If no one is buying, in theory the stock can go to zero, although there are lots of cavets here that are way beyond the scope of the question.
If there are no buyers for stock, for whatever reason, the stock could go to zero, although the company still has assets (like money, factories, trucks, etc), so until it doesn’t have anything of value, the stock is still technically something not zero. When a company has a zero price stock or very low price, some much more complicated stuff starts happening, such as the company going out of business but selling off their assets (like say buildings, trucks, etc.) and giving their shareholders whatever they can from those sales. At that point as well, the stock may no longer be traded on the public markets anyways, which is called “delisting”, and happens when a company is going out of business, you can’t trade its stock anymore.
short answer? the stock price drops until SOMEONE buys it….or the company goes bust and the stock is worthless….sometimes both.
you cant *force* the company to buy your stock back off you, no. You bought into the company and its future, you ride the highs AND the lows.
If the company goes bust, your suppose to receive a cut of whats left after liquidation, equal to your share of the company, but whatever that is will be much less than what you paid for it..
the price drops, and as long as fossil fuel is the cheapest source of energy there is a few billion billion people that are too poor to give one damn about rich people thinking fossil fuel are bad
short answer? the stock price drops until SOMEONE buys it….or the company goes bust and the stock is worthless….sometimes both.
you cant *force* the company to buy your stock back off you, no. You bought into the company and its future, you ride the highs AND the lows.
If the company goes bust, your suppose to receive a cut of whats left after liquidation, equal to your share of the company, but whatever that is will be much less than what you paid for it..
So long as fossil fuels continue to generate profits, there will be someone willing to buy the stock.
The decision to divest from fossil fuels is mostly about principals. A person or institution who owns stock in a fossil fuel company stands to gain from doing so, either through direct dividend payouts that split the profits of the company among its shareholders, or indirectly through growth in the price of the stock as they hold it. If you view fossil fuels as an inherently evil thing, you might feel dirty taking money from a company that deals in them, and that’s fine. Investing doesn’t just have to be about profits.
But for a great many dollars in the market, investing *is* just about profits. This isn’t just individual hedge fund guys. Pension funds, mutual funds, sovereign wealth funds, trusts, etc. all invest money with minimal oversight from the people who actually have a claim on that money. Many have legal obligations to invest according to certain rules or to maximize returns given some level of risk. So long as it’s a good financial investment, these entities will happily buy up divested fossil fuel stocks. The price of those stocks may dip as they’re divested, but they’ll never fall that far below whatever fundamental valuation the fossil fuel business can support.
It’s tempting to entertain a hypothetical of “what if there was a company widely acknowledged to be profitable, but no one would buy its stock at any price?” but it’s so far outside the reality of investing, it’s hard to even know how to begin talking about it. There are frequently stocks that nobody wants to buy, but that’s because of some new information that makes them worthless (like the company was a scam). It would be like having a perfectly good $20 bill that the store won’t take “just ’cause”.
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