If I buy 100 shares of a company, does their bank account go up? And if shares are sold do they go broke?
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In most cases (exceptions below) you don’t buy shares from the company, you buy shares of stock from other people who own shares of stock already. That could be other individuals, hedge funds or mutual funds, or so-called market makers in that stock. Their bank account goes up, not the company’s.
Of course, they have to get their shares from the company at some point. A so-called private company (not traded on an exchange) issues shares to its owners. They can also issue shares to employees (like stock options) at any point. When the owners want to take the company public, they do an IPO – an initial public offering, where shares are offered to the public like you and me for the first time. This is how the company gets money for its shares.
Companies can also issue more shares after the IPO, including to the public, but they tend not to: it dilutes the value of the stock when there is more of it. However, if the price is super high, they might do it take advantage, since they get more money for less stock.
To your last question: if everyone wants to sell shares, then their price goes to zero because there are no buyers. The company doesn’t go broke because it’s not their cash being drained, but this obviously means they’re in serious trouble.
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