If a person owns $2B worth of stock in a company that only has $300M cash on hand. And that person decides to sell all their stock. Where does the rest of the money come from? I can’t imagine people continuing to buy shares that are put on the market so the money has to come from someplace.
In: Economics
> I can’t imagine people continuing to buy shares that are put on the market
That’s like, the entirety of the stock market. The company itself usually isn’t involved in the transaction. If Person A owns the stock, the can sell it to Person B, C, D, etc. B, C, and D are paying for it, not the company. Company itself is usually only involved during the initial public offering (IPO), where the stock is available and sold for the first time. Or during stock buybacks.
Why would people do that? Because stocks equal a portion of ownership. If I own Reddit stocks, it means I literally own a part of Reddit. I, and other stock holders, can vote on what Reddit does as a company. If the company does well and is making tons of money, then my ownership of Reddit becomes more valuable. I can then sell it for a profit.
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