why do we have the stock market

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k1982
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why do we have the stock market

Post by k1982 » Tue Mar 31, 2020 12:28 am

i hope this isn't a dumb question
but why do we have the stock market? what is the point of it?

for example, AAPL has a market cap of 1.1 trillion and each share selling at roughly @ $255

we all know AAPL is very strong company and will be around for decades to come

what does this 1.1 trillion mean to AAPL? does it make money off that? can it borrow money against it?

what if for some reason everybody in the world decided to sell all their shares of AAPL (for some unknown reason)
and the market cap was zero. Would AAPL go bankrupt?


i apologize in advance if i'm misinformed :confused :confused

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Re: why do we have the stock market

Post by watchnerd » Tue Mar 31, 2020 12:42 am

[Quoted comment removed by moderator oldcomputerguy]

Or, hey, how about:

"The purpose of a stock exchange is to facilitate the exchange of securities between buyers and sellers, thus providing a marketplace. The exchanges provide real-time trading information on the listed securities, facilitating price discovery."

https://en.wikipedia.org/wiki/Stock_market

Or perhaps what OP is really trying to ask is why do stocks exist?

https://en.wikipedia.org/wiki/Stock


I'm torn.....are questions like these a sign of a bottom or a new bubble?
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Re: why do we have the stock market

Post by mega317 » Tue Mar 31, 2020 12:47 am

Maybe it's a sign someone wants to learn something. Sheesh
https://www.bogleheads.org/forum/viewtopic.php?t=6212

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Re: why do we have the stock market

Post by watchnerd » Tue Mar 31, 2020 12:51 am

mega317 wrote:
Tue Mar 31, 2020 12:47 am
Maybe it's a sign someone wants to learn something. Sheesh
Well, I would hope people who are asking about buying in the dip (in other threads) would know what a stock is first.

Yes, I'm old school. I think investors should have basic literacy in investments before throwing money into the markets in a self-directed fashion.

If not, then a Target Date, Life Strategy, or similar fund is perfect.
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Re: why do we have the stock market

Post by LFKB » Tue Mar 31, 2020 12:52 am

k1982 wrote:
Tue Mar 31, 2020 12:28 am
i hope this isn't a dumb question
but why do we have the stock market? what is the point of it?

for example, AAPL has a market cap of 1.1 trillion and each share selling at roughly @ $255

we all know AAPL is very strong company and will be around for decades to come

what does this 1.1 trillion mean to AAPL? does it make money off that? can it borrow money against it?

what if for some reason everybody in the world decided to sell all their shares of AAPL (for some unknown reason)
and the market cap was zero. Would AAPL go bankrupt?


i apologize in advance if i'm misinformed :confused :confused
Companies use the stock market to provide shareholders to take cash or for the company to raise capital to fund growth, make acquisitions, repay debt, etc by selling shares in their company

Yes - Apple’s shareholders make money off the market cap when they sell shares. Let’s say Steve Jobs owned 100% of Apple (he didn’t, but as an example) when they went public and the equity valuation was $1 billion. He could sell 20% of the business to the public and cash out for $200 million. He would then own the other 80% of the company that he didn’t sell. As the stock price goes up, his 80% becomes more valuable. Employees also typically receive incentive shares and benefit from a growing stock price.

A zero stock price would typically signal a bankruptcy, but wouldn’t go bankrupt if everyone sold their shares and the market cap went to zero so long as they produced enough cash to fund their financial obligations (debt and other liabilities). In reality, Apple generates billions of dollars of cash flow per year, so it would not make any sense for their market cap to go to zero. If Apple had a market cap of $1 billion but generated $12 billion of cash flow per year, you could buy the whole company and have your investment totally paid back after one month. This is why companies typically trade at multiples of their cash flow or earnings.
Last edited by LFKB on Tue Mar 31, 2020 12:55 am, edited 1 time in total.

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k1982
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Re: why do we have the stock market

Post by k1982 » Tue Mar 31, 2020 12:53 am

so this 1.1 trillion market cap in AAPL
lets say it goes down to 0 ..yes 0

however, the company is still producing 24/7 and making billions in revenue every year.

how would this $0 in market cap effect the company? if at all...

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k1982
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Re: why do we have the stock market

Post by k1982 » Tue Mar 31, 2020 12:56 am

thank you LFKB
your response was very beneficial
it gave me a real life example that made sense

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Re: why do we have the stock market

Post by watchnerd » Tue Mar 31, 2020 12:58 am

k1982 wrote:
Tue Mar 31, 2020 12:53 am
so this 1.1 trillion market cap in AAPL
lets say it goes down to 0 ..yes 0

however, the company is still producing 24/7 and making billions in revenue every year.

how would this $0 in market cap effect the company? if at all...
That's paradox.

You can't have billions in profit (which I assume you mean, and not revenue), and a stock price of $0, as someone would buy up the shares well before that.
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Re: why do we have the stock market

Post by DonIce » Tue Mar 31, 2020 1:00 am

Companies sell equity to raise money. It's a one-time fund-raising event for the company, when they offer shares to the public (sometimes they can offer additional % shares at a later date, etc). The reason that the stock market exists is because after the original purchasers of the shares from IPO own the stock, they sometimes want to be able to sell it, and other people want to be able to buy it.

The company is not directly affected by the value of its shares after they have already been sold to the public, except:
- if they want to sell more shares to raise more capital
- if they want to buy back some of the shares
- how attractive the company is to another company to buy

For example, if AAPL was low on cash and its share price was $0, it wouldn't have the option of selling more shares to raise more cash, since people would only be willing to pay $0 for more shares.

On the other hand, it could buy back all of its shares for $0 and go fully private, no longer being beholden to the interests of outside shareholders.

Also, if the market cap was $0, another company could buy it for $0 and own that revenue stream.

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k1982
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Re: why do we have the stock market

Post by k1982 » Tue Mar 31, 2020 1:10 am

thank you DonIce and LFKB
both of those answers were very helpful !

now i can somewhat envision the stock market in my head

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Re: why do we have the stock market

Post by jjface » Tue Mar 31, 2020 1:18 am

Quite simply when you buy a share you own a piece of the company. When the company initially issued the shares the buyers provided the company with equity capital it could use in the business. Though equity shares can also be resold and bought by others and that doesn't raise any new funds for the company.

The trillion or whatever is how much the company is worth. There are various ways a company is valued looking at its current assets and future prospects. When that value goes up so does the value of your "share". It can't borrow against that but part of the value will be assets it owns that it can borrow against. Much like a mortgage secured on a house.

The point of the stock market is to provide capital to companies and enable ownership of the companies to be spread to the public. So that they can enjoy the benefits of owning a piece of a company including the risks and rewards that go along with it. A shareholder will usually have voting rights in the major decisions but control is delegated to a team of directors led by the CEO. The shareholders own the company and the directors run it on their behalf.

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Re: why do we have the stock market

Post by Iridium » Tue Mar 31, 2020 1:41 am

Let's start broadly with the question of why equity exists. There will always be a point in a company's life, where it needs more money than the profit it is making. If the amount is relatively small, then the founder can pay it out of personal savings and move on. What gets more interesting is what happens when that sum of money needed exceeds the personal savings of the founder.

Now, this might be for something great for the company. Let's say that there is an expansion opportunity that costs a million dollars and is expected to return $100K / year. Now the most obvious approach is to borrow the money. Maybe the payments are $70K / year, so hypothetically, it makes sense to take the loan in order to fund the expansion. However, there are a couple of problems with debt. First, the person lending you money takes the risk that the loan won't get paid back at all (assuming something goes wrong with the expansion) but the maximum benefit the lender can ever receive is the interest rate charged. So, the lender cares a lot more about the downside than the upside and can be difficult to convince to make the loan if the outcome is unclear. Second, if something goes mildly wrong with the expansion (let's say it only brings in $60K / year), the company has to scramble to make up the difference. If it cannot, then the loan goes into default, which results in all heck breaking loose (it could eventually force all assets of the company to be fire sold). So, from the company's perspective, debt is nice in that all the upside is kept, but unfortunately so is all the downside, and, with high enough levels of debt, it becomes dangerous. Fortunately, there is another way. One could imagine that instead an investor could be found who is willing to take a piece of the action. Let's say that hypothetically, the existing company is worth a million dollars. So, an investor might say that they will give a million dollars to the company, but in return want half the company. Immediately afterward, nothing looks like it has changed: a company with an intrinsic value of a million dollars that has a million dollars in the bank is worth 2 million dollars. The founder used to own all of a million dollar company but now owns half of a two million dollar company. The investor used to own a million dollars of cash, but now owns half of a two million dollar company. However, if the expansion is successful, then the company is likely to be worth more than $2 million. If the expansion exceeds expectations, the company might be worth substantially more than $2 million. Unlike with debt, with equity, investors benefit from performance exceeding expectations, so may be more willing to invest in projects whose outcome is less clear (the potential unexpected upside balances some of the unexpected downside). Another perk of this approach is that nothing is promised to the investor. If things turn out worse than expected, then no fire sale is forced. The investor simply takes the lump and hopes that fortunes turn around. So once a founder's savings are exhausted and the company's debt load is as high as he can get without being dangerous, it makes sense for a company to raise more money with equity.

Why does the stock market exist?

The investor in the above example hopes to eventually get money back on the investment. The obvious approach is to find another investor who wants to own half of a company and then agree on a price. However, as the company gets more valuable, this gets less and less convenient. Fewer investors have a hundred million they want to tie up in a single company. So, at some point, the original investor's 50% interest has to be split up for sale. If you can't find someone to give you $100M for 50% of a company, you might be able to find 10 people to give you $10M for 5% each.

The stock market takes this its logical and extreme conclusion. Company ownership is split into millions or billions of parts (shares). However, normal investment transactions require lawyers and contracts and due diligence that is simply impossible when transacting $1000. So, rules are standardized: everyone agrees to the same timelines, methods of payment, manner of proving ownership of shares and how transfers of that ownership is transferred. Rather than investors needing to do their own due diligence and audit the books, the companies hire outside firms to audit and certify the books. All of a sudden, you now have a system where, instead of it taking months and tens of thousands of dollars of legal bills to buy a piece of a company, you need less than a second and $10 brokerage commission to do the same thing. This means that the universe of possible investors grows enormously, which in turn actually means the value of the company goes up (more investors = more demand and less money for lawyers = more money to buy shares). So, that original investor I mentioned way up above? Usually, his/her goal is to hold on until the company gets big enough to justify trading on the market. Not only does this give the original investor the intrinsic growth in company value, it saves them the work to find investors to buy their piece of the company, and they get to enjoy the pop in value that comes when a relatively hard to transact asset becomes trivial to transact.

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Re: why do we have the stock market

Post by MoneyMarathon » Tue Mar 31, 2020 3:04 am

k1982 wrote:
Tue Mar 31, 2020 12:28 am
i hope this isn't a dumb question
but why do we have the stock market? what is the point of it?

for example, AAPL has a market cap of 1.1 trillion and each share selling at roughly @ $255

we all know AAPL is very strong company and will be around for decades to come

what does this 1.1 trillion mean to AAPL? does it make money off that? can it borrow money against it?
The shareholders own the company. One of the most important decisions they make is who to hire as CEO or whether to fire the CEO. This person and the rest of the organization receives a lot of compensation in stocks, options, or performance bonuses related to how the stock performs. So the organization's people are motivated in a way by the stock market, even if higher stock prices don't put anything on the company's balance sheet.

The way companies improve the performance of the stock is essentially two things: increase earnings and use earnings to pay out cash in buybacks and dividends. There are some exceptions to this (assumptions of future earnings growth can push up prices). But, generally it's this cash flow that justifies the ownership of stocks as an investment. Around 4% to 5% a year of the stock price has been paid out by US companies in the S&P 500 through dividends and buybacks, as an average, in the last few years. This is about 80% to 90% of company earnings.

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Re: why do we have the stock market

Post by sterjs » Tue Mar 31, 2020 4:59 am

k1982 wrote:
Tue Mar 31, 2020 12:53 am
so this 1.1 trillion market cap in AAPL
lets say it goes down to 0 ..yes 0

however, the company is still producing 24/7 and making billions in revenue every year.

how would this $0 in market cap effect the company? if at all...
Once the price/book values drops below 1, theoretically shareholders would vote to liquidate the company's assets since they are worth more than the shares.

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Re: why do we have the stock market

Post by Mr. Rumples » Tue Mar 31, 2020 5:30 am

Of the Fortune 500 companies around in 1950, less than 100 remain. Who remembers Cone Mills Corp? At one time, it was not only a Fortune 500 company, but had entire towns and political subdivisions under its control in the southeast; it built a major hospital and operated sports clubs and even had a country club. Now its forgotten except for some of us of a passing generation. There is no telling who will be around in 20 years.

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Re: why do we have the stock market

Post by nisiprius » Tue Mar 31, 2020 6:42 am

k1982 wrote:
Tue Mar 31, 2020 12:28 am
...What does this 1.1 trillion mean to AAPL? does it make money off that? can it borrow money against it?
No. At the time Apple issued the stock, Apple sold it to investors in an initial public offering (IPO). It has the money it made in that sale. If it bought something with that money, it has whatever it bought. If you bought shares in the IPO (for a retail investor, difficult to do and a bad idea) then you paid money to Apple.

Once it has sold the shares, it doesn't own them any more. If they go up, it doesn't help Apple. (There may be people at Apple who are paid partly in stock, or who are given stock, who have a direct personal reason to care, however, and a company can own some of its own shares).

When you buy shares of Apple at a brokerage, Apple doesn't get any money from you. You are buying them from another investor. It's sort of like buying a car. When Fiona buys a new Toyota, Toyota gets money from Fiona. When you buy that Toyota from Fiona as a used car, Toyota doesn't get any money. Every share of stock in the market is a second-hand share, a used share. Except that they usually appreciate instead of depreciating!

If you buy stock "on the secondary market," i.e. through a brokerage from the stock market, you have two connections with the company, one financial, one legal. The financial connection is that most mature companies pay dividends on their stock, and as a stockholder you are entitled to get them. The legal connection is that you have a right to vote in the annual meeting... which means that, in theory--in practice if you are a big enough investor--you can control who is on the board, so you can indirectly control the company by electing board members you are sure will do what you want.

The right to elect board members is called "owning" part of the company, but it has never really seemed like it to me. You can't go to Cupertino with a stock certificate in your hands and say "here's my stock certificate, now saw off the chunk of the building that belongs to me and give it to me."
what if for some reason everybody in the world decided to sell all their shares of AAPL (for some unknown reason) and the market cap was zero. Would AAPL go bankrupt?
Cause and effect goes the other way. If Apple were in serious financial danger and appeared to be close to bankruptcy, the stock would go almost to zero, because most people would not want it. They wouldn't want it because the chances if it ever paying anyone dividends would look nonexistent. It wouldn't go quite to zero, because there are always a few people who like risky financial bets who would say "I'll buy Apple stock if it's cheap enough because I think there's a chance it could come back from the almost-dead."

Apple heading for bankruptcy causes people to sell it and the price more or less goes to zero. Apple actually going bankrupt, it depends on the kind of bankruptcy. In a common kind, it is reorganized and becomes a new company and there's an opportunity to swap shares in the old company for the new one; in a rarer kind, the company actually vanishes and the stock does become worthless, because there isn't any entity to pay out any dividends.

Now consider it the other way around. If Apple were in fine shape as a business, and every Apple stockholder in the world decided to sell their stock--perhaps because someone launched a campaign to do it to punish Apple for something--what would happen? Let's say the price of Apple is $250/share. Stocks are sold in an auction market. "Every" Apple stockholder tries to sell. Well, if the company is in great shape, if they go an ask $249 for it, they will have no trouble at all selling it. Every Apple stockholder will be able to sell at only a little below $250, and every share of Apple will change hands and be bought by someone who didn't own it before. The price of Apple stock will drop a tiny bit, but not much, because if it is still in good shape as a business, all the people who don't own Apple at $250, will be glad to buy it if they think it is worth $250 and they can get it for $249.

Oh, I suppose trying to sell all the Apple stock would be difficult just because not enough people have enough money to buy it, plus an event like that would create rumors and weird psychological effects.

The point is, you've sort of stated an impossibility. You've said "everybody in the world decides to sell all their shares of AAPL for some unknown reason," and basically it couldn't happen unless the unknown reason involved Apple facing business death--and it is the business problems that are the cause, both of bankruptcy, and people dumping Apple stock.
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Re: why do we have the stock market

Post by goblue100 » Tue Mar 31, 2020 7:30 am

I like the car analogy, above. The company only makes money off the initial sale, everyone can sell and resell their car (or stock) but the money doesn't go to GM or Ford.
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Re: why do we have the stock market

Post by yangtui » Tue Mar 31, 2020 7:36 am

k1982 wrote:
Tue Mar 31, 2020 12:28 am
we all know AAPL is very strong company and will be around for decades to come

I don't know this.

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Re: why do we have the stock market

Post by MotoTrojan » Tue Mar 31, 2020 7:37 am

Tesla recently raised several billion dollars near their peak price, before it came crashing down (closer) to reality. Let’s say it’s market cap was double the price they otherwise would’ve raised at, that means they can get twice as much capital for the same dilution, or half the dilution for the same price. Shares can also be used as collateral (Elon does this for $100M’s in personal credit lines).

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Re: why do we have the stock market

Post by oldcomputerguy » Tue Mar 31, 2020 7:48 am

An off-topic post was removed. As a reminder, see General Etiquette:
At all times we must conduct ourselves in a respectful manner to other posters.
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Re: why do we have the stock market

Post by JoMoney » Tue Mar 31, 2020 8:03 am

k1982 wrote:
Tue Mar 31, 2020 12:28 am
... what does this 1.1 trillion mean to AAPL? does it make money off that? can it borrow money against it?
Equity is different than debt, it can be used like a debt alternative. The market generally considers new issues dillutive, it's risky, but sometimes it works out well. It's not uncommon for a buyout of another company to happen with new stock getting created. Say Apple wanted to buy another company, they could borrow the money to raise the funds, but if the interest was too high and they felt there stock was selling at a premium, they could work out a deal where they sold new shares to raise the funds, or maybe just create new shares and exchange them for the shares of the owners of the other company. Generally equity is considered precious, the current shareholders and board members might not allow it, but sometimes they're persuaded that it's a good idea, or better than other options (like going into debt or out of business).
k1982 wrote:
Tue Mar 31, 2020 12:28 am
... what if for some reason everybody in the world decided to sell all their shares of AAPL (for some unknown reason)
and the market cap was zero. Would AAPL go bankrupt?
Someone would have to be buying for someone else to be selling, so "everyone" couldn't. Equity holders have no promise of any particular return on any particular date, so equity can't really "bankrupt" a company. The advantage of equity for the business, is these owners are the ones who bear the risk of the wildly variable returns with no specific promise. If the company was financed completely with debt, the first time they missed earnings they would be bankrupt. ... You might suggest they could have a reserve of cash saved up, but who would "own" that cash reserve sitting around? The owners of that reserve would be "equity".
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: why do we have the stock market

Post by magicrat » Tue Mar 31, 2020 11:15 am

k1982 wrote:
Tue Mar 31, 2020 12:28 am

we all know AAPL is very strong company and will be around for decades to come

I don't know that Apple will be around for decades. How do you know?

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Re: why do we have the stock market

Post by whereskyle » Tue Mar 31, 2020 11:37 am

k1982 wrote:
Tue Mar 31, 2020 12:28 am
i hope this isn't a dumb question
but why do we have the stock market? what is the point of it?

for example, AAPL has a market cap of 1.1 trillion and each share selling at roughly @ $255

we all know AAPL is very strong company and will be around for decades to come

what does this 1.1 trillion mean to AAPL? does it make money off that? can it borrow money against it?

what if for some reason everybody in the world decided to sell all their shares of AAPL (for some unknown reason)
and the market cap was zero. Would AAPL go bankrupt?


i apologize in advance if i'm misinformed :confused :confused
Great question, the answer to which will hopefully help you understand this overcomplicated financial system. Stocks are just tiny little ownership interests in companies. Think of it as owning a piece of the company. Apple sells pieces of the company to gain additional revenue in order to do more things and hopefully earn more money for the existing owners (and newly minted shareholders). Remember also that Apple cannot sell its shares unless someone buys them. Selling the company will not bring the market cap to zero. Only giving it away or going bankrupt will do that. But even if apple tries to give itself away, you as shareholder are part owner, so they'll owe you your interest in the company. If Apple decides it wants out of the business and it just closes up shop, it still owns assets that have value and either it or some executor of its ownership interests would sell the assets it owns to cover its liabilities, part of which is liability to shareholders. You would have some entitlement to the returns on those assets as an owner of the company. The real risk for owning stocks is not that the company will be sold (you'll either get a payout or shares in the purchasing company), but the risk that the company will go bankrupt (see Enron). You don't get anything if the company goes bankrupt and in turn the company is not worth anything. Then your stock in that company is worth its share of the company, and there are no fractions of zero.

I think it's good for you to think about this, because when prices fluctuate you may think that you own more or less than you do. Think about Google. It makes a lot of money from advertising but it also owns a huge computing infrastructure, patented algorithms, and android and chromebook devices around the world, and all of its $100bn in cash on hand. Even if all the scary talk about advertising regulation hurts Google's perceived present value on the stock market and may eventually hurt Google's profit margin, Google still owns a lot of stuff, and a Google shareholder owns her share of all of that stuff. The price of a share of business will fluctuate based on a host of factors, but it is important to remember that many valuable companies themselves own intrinsically valuable properties. Price fluctuations scare everyone, but I calm myself by knowing that I don't own the price, I own the company. What the company does, buys, and sells can affect the price, but with index investing you are virtually certain to hold at least some well-run, financially viable companies. Although I discourage stockpicking, I always like to see cash on hand. When you buy Apple, Microsoft, Berkshire Hathaway, and Google in particular, you are buying a share of the $100bn they have just sitting around for future investments (or for liabilities to shareholders). While that cushion might not be as big as one might initially think because of the costs of doing business, a company's cash on hand always gives me some comfort that I can get some of my investment $ back, although hopefully I get a whole lot more than that if I hold on long enough.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle

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Re: why do we have the stock market

Post by bertilak » Tue Mar 31, 2020 11:40 am

k1982 wrote:
Tue Mar 31, 2020 12:28 am
i apologize in advance if i'm misinformed :confused :confused
To be truly informed you need more education than you will get from responses on an Internet forum, even one of the best, like Bogleheads.

In short: The stock market is a central institution of capitalism. (from the American Institute of Economic Research.) So, in order to understand the stock market one needs to understand capitalism.

Some "book learnin" is a good idea. Try Peter L. Bernstein's Capital Ideas.
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Re: why do we have the stock market

Post by k1982 » Tue Mar 31, 2020 11:45 am

****When you buy shares of Apple at a brokerage, Apple doesn't get any money from you. You are buying them from another investor. It's sort of like buying a car. When Fiona buys a new Toyota, Toyota gets money from Fiona. When you buy that Toyota from Fiona as a used car, Toyota doesn't get any money. Every share of stock in the market is a second-hand share, a used share. Except that they usually appreciate instead of depreciating!****

thank you nispirus

direct / real life exchanges like that make it much simpler to understand
:sharebeer

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Re: why do we have the stock market

Post by Phineas J. Whoopee » Tue Mar 31, 2020 5:02 pm

Without disagreeing with previous posters, corporations can make acquisitions; they can buy another corporation, public or non-public, paying partly or wholly in stock. A high stock price makes them more capable to do so. If the agreed price is a fair one the existing shareholders aren't harmed. Often, however, we observe the acquiring company dropping in market price, and the acquired one rising.

That's because a market price is nothing more nor less than the most recent price agreed by the most eager seller and most eager buyer. It might be for 1,000 shares. It might be for 100 shares. It might be for 1 share. The market convention is to value all shares at that price, until the next transaction.

Most owners are not willing to sell at what we call the market price. They hold on to their shares. In order to entice those shareholders to sell -- and there's a point, but a high bar, at which they're compelled to -- the acquiring company has to offer more than market.

PJW
Last edited by Phineas J. Whoopee on Tue Mar 31, 2020 6:18 pm, edited 1 time in total.

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watchnerd
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Re: why do we have the stock market

Post by watchnerd » Tue Mar 31, 2020 5:19 pm

Phineas J. Whoopee wrote:
Tue Mar 31, 2020 5:02 pm
Without disagreeing with previous posters, corporations can make acquisitions; they can buy another corporation, public or non-public, paying partly or wholly in stock. A high stock price makes them more capable to do so. If the agreed price is a fair one the existing shareholders aren't harmed. Often, however, we observe the acquiring company dropping in market price, and the acquired one rising.
In one of my VC-backed startups, the CEO was an ex-Oracle M&A executive.

We had an interesting conversation about how do you determine whether to use stock, cash, or debt (or a mixture) to acquire another company.

Aside from the obvious "cost of money" question and board approval angles (if a material acquisition), shareholder class action lawsuit risk was the other major angle.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

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