I don't understand how the stock market works in one way. What would happen if say a stockholder predicted the values of his shares would plummet soon, but so did everyone else. Hence no one wanted to buy his shares of this company. Is this investor SOL or is he somehow guaranteed that the market will give him cash in exchange for his dismal looking stock even if no other investor wants to buy the shares? Does my question make sense?
2006-12-04 03:56:57 · 12 answers · asked by kmm4864990 1 in Business & Finance ➔ Investing
1) Yes.
2) The stock price is reduced. (This happens in a millisencond)
In theory the stock price could go down all the way to $0.01 however, keep in mind companies have some money in their bank accounts, cars, buildings and many more things.
If a company has 1,000,000 shares and they have 1000 cars (2006) and the stock goes down to $1.00 USD then you could just buy the entire company for $1,000,000.00 a sell each car for a lot more.
Obviously somebody smart will figure this out before it happens and they will buy shares for a lot more than $1.00
2006-12-04 07:17:25 · answer #1 · answered by Anonymous · 0⤊ 1⤋
1
2016-12-23 21:11:39 · answer #2 · answered by Anonymous · 0⤊ 0⤋
The only time I've had trouble selling stock was when I was asking too much for the stock and nobody would buy it for the price I was offering it at. Then there are the times I sold at the market bid price which is usually lower than the current price but it always sold. The hardest to sell have been the low volume, small cap, couple a dollars stocks. Not a lot of people know about them so not a lot will be bidding for them. Either way I've never had a stock I could not sell.
2006-12-04 04:53:03 · answer #3 · answered by reallyno 3 · 0⤊ 0⤋
Yes you can. The stock market is not necessarily a zero sum game, although a lot of times it can be. When you invest in the the stock market you are buying a company. So buy good companies, just like you would buy a good car. And everything will go well for you. If you need extra help, spend some time talking to people on good stock investing web sites.
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2016-04-16 09:03:41 · answer #4 · answered by Anonymous · 0⤊ 0⤋
For every NYSE and AMEX stock there is someone called a Specialist. It is his job to control the flow of buying and selling so that there is always a market. Ordinarily, he will match up buyers with sellers. But if there are only buyers or sellers -- then he is required to jump in and take the other side of the trade.
Obviously, if everyone is selling and he has to buy, he will try to set the price lower. There are certain rules in place so that he can't abuse his power very much. A lot of specialists lost a lot of money when the stock market crashed in 1987 -- because they were forced to buy.
For NASDAQ stocks, the process works a little differently. Instead of one specialist, there are multiple market-makers -- who usually work for large brokerage firms. They try to make an orderly market in NASDAQ stocks. They are required to post two prices -- the price that they are willing to purchase at and the price they are willing to sell at. They also post the number of shares they are willing to buy or sell at those prices. They are required to post something -- and it their offer gets hit, must post a new price and level.
2006-12-04 05:19:22 · answer #5 · answered by Ranto 7 · 0⤊ 0⤋
The scenario you described is the worse possible case. There have been times where nobody would buy any shares of the company because it was basically at guaranteed lost. If that happens, you are pretty much SOL. This is why it's important to look at the volume of the stocks you are interested in. The volume determines the liquidity of the stock. The more volume, the greater the chances of someone buying your shares. See http://ibooyah.com for more investment matters. You might learn a few things. :-)
2006-12-04 05:12:38 · answer #6 · answered by buklao 3 · 0⤊ 0⤋
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2016-02-16 07:45:02 · answer #7 · answered by ? 3 · 0⤊ 1⤋
A stock that has few buyers is often referred to as "thinly traded stock." Usually thinly traded stocks do not have much of a presence of "market makers" or professionals that trade in the particular stock in order to make the market run smoothly for that stock. So you might consider investors SOL if they can't find a buyer until lots of damage is done.
2006-12-04 04:17:50 · answer #8 · answered by kcincon 3 · 0⤊ 0⤋
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2014-10-03 20:50:59 · answer #9 · answered by Anonymous · 0⤊ 2⤋
No guarantees. By investing in etfs & mfs you don't worry about 1 apocalyptic stock. Not an issue to be pondering - just invest!
2006-12-04 04:15:28 · answer #10 · answered by vegas_iwish 5 · 0⤊ 1⤋