What happens when you sell stock?
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10-16-2012, 03:58 AM
Post: #1
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What happens when you sell stock?
So I'm a finance major in college and none of my classes have yet told me what exactly happens when you sell stock. For example, businesses are worried about their debt because if they can't pay off the interest they can go into bankruptcy. Why isn't it the same for stock? Is it because the only money a company gets is from its IPO and stock offerings after that? For example, they receive the money from the IPO, but when the price fluctuates in the secondary markets afterwards, the company doesn't receive any of that money, if the stock price rises? And when the shares are sold, they aren't sold back to the company but in the secondary market to other investors? Since I assume that's the case, how can shares be sold so quickly? How can the cofounder of facebook sell 6 million shares whenever he wants? Who purchases it? If I had 6 million shares of facebook on etrade could I sell it all at once, obviously theoretically speaking? I guess I just don't understand how stocks can be bought and sold so quickly, as wouldn't you have to wait for someone to want/ask for it? Thanks in advance.
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What happens when you sell stock? - Ghost - 10-16-2012 03:58 AM
[] - pegasusaig - 10-16-2012, 04:06 AM
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