I know that stock prices go up and down, but who decides how much they're worth?
2006-07-26 11:52:07 · 8 answers · asked by Crushgal 3 in Business & Finance ➔ Investing
The buyer and seller do, using a broker (or by mutual agreement). What happens is the someone makes an offer.
For example, a Buyer will offer to purchse, say, 1000 shares of XYZ company at $10 per share. If noone (or no combination of people) with 1000 shares of XYZ is willing to sell at that price, nothing happens.
The opposite is true, too. Sellers can say: Hey! I've got 1000 shares of XYZ, and I want $20 a share. If noone is willing to pay that much, nothing happens.
Brokers operate by keeping track of who wants what, how much they're willing to pay for it, who has it, and how much it'll take for them to part with it.
2006-07-26 12:01:05 · answer #1 · answered by hogan.enterprises 5 · 2⤊ 1⤋
You can get into all kinds of supply/demand analysis, mathematical equations to determine fair value, etc. But, the bottom line is - a stock is worth what someone is willing to pay for it. If IBM is trading at $50 per, then that's what the majority of people is saying it's worth to them.
During the stock bubble of the late 90's, people were bidding up prices on companies that had no track record because that's what those traders were willing to pay for it. The company may have been a dog, but if the investors wanted to pay $300 per for the stock, then that is what it was worth to them.
In a nutshell, the market sets the price of the stock - whatever people are willing to pay for it.
2006-07-27 01:12:57 · answer #2 · answered by 4XTrader 5 · 0⤊ 0⤋
The company decides what they want to offer the stocks at to begin with, but the market decides whether they go up or down from there...or if the starting price is too high.
As with any other service or product in a capitalistic system, the price is determined by it's availability and how much value the buyer places on it (supply and demand).
2006-07-26 11:58:05 · answer #3 · answered by Ronald G 2 · 0⤊ 0⤋
The price changes with the desire to own the stock. If more people want the stock, the price gets bid upward - thus the price you need to pay to buy it goes up also. If there is more sell orders than the price will lower since people are trying to dump their stock.
2006-07-26 11:58:24 · answer #4 · answered by Mike K 3 · 0⤊ 0⤋
supply and demand. They are bought and sold, some with a kind of auction process, some by matching computer buyers and sellers. Sometimes prices move for next to no reason, sometimes there will be big moves if earnings are good, or a new product comes out etc. Same thing for prices going down. Bad news and everyone wants to sell.
That is the big problem for 99% of individual investors. No matter how good you are, the big traders and such will always get news before you.
2006-07-26 11:58:00 · answer #5 · answered by Anonymous · 0⤊ 0⤋
It depends on how many people buy them. The more people buy of a certain stock the more it will be worth. The less people are buying the less it is worth.
2006-07-26 11:55:02 · answer #6 · answered by mom_of_4 6 · 0⤊ 0⤋
Demand for the stock.
2006-07-26 11:55:39 · answer #7 · answered by Anonymous · 0⤊ 0⤋
demand for the stock and supply of the stock
2006-07-26 14:27:54 · answer #8 · answered by Anonymous · 0⤊ 0⤋