When I buy a stock, does that money go to the company, and when I sell, do they write a check?

Question

Selling and buying a stock.

Answer 1

Usually, you float money through "the market" when you buy or sell stocks. An exchange (such as, but not limited to, the New York, or American, or NASDAQ exchanges) is a place were various people place orders to buy and various others place orders to sell, so specialists and other intermediaries match them and make the (literal) trade. There are brokerage firms which finance those intermediaries to fill your orders, always at a price. When I sell a stock and you buy a stock, if it so happened to be the same stock at the same time, I get money from the brokerage, less commissions, and you give money to your brokerage, less commissions, and somewhere in the exchange or brokerage firm's clearing process the stock is "settled".

When a company first issues stock to the public, it is called an Initial Public Offering (IPO). At that point the company issuing stock gets money for its shares. Afterwards, unless the company sells more shares, your investment money is paid to the previous holder of those shares. Still, you have a stake in that company. If the company shares a part of its profits, you get your share in that distribution. If the company sells a new issue of stocks, you get an opportunity to maintain your proportional share by an offer in which you may buy more of the new issue. (This is not to say that if the company buys back shares from the open market one day and then sells again those already issued shares on the open market the next day that you have a right to those--that is different). When you write the check to buy, you are paying the seller of someone else who has already owned but is now parting with shares. When you sell, only if the company happens to be buying shares back in the market would they be writing a check, so to speak, for those shares. Either way, you do not know, it is hidden in a mass of similar exchanges that take place almost every minute of the business day. No one knows the sellers. No one knows the buyers. No one cares as long as the money and shares change hands as they should.

Answer 2

It depends on where you buy the stock from. If it is from an initial public offering then the money goes to the company. Such markets are called primary markets.
If you buy the stocks from a broker the company don't get your money only your address if the stock has to be transferred to your name. The money goes to the seller of the stock. This market is called the secondary market where stock exchanges create the market.
The comapnies writes checks only when they pay you dividends or if some companies buys back shares in the open market etc;.

Answer 3

When you buy a stock,the money goes to the company offering the stock.When you now sell the stock through the stockbrokers,they give you check.

Answer 4

Companies sell stock to the general public to get a "Start-Up Fund", if you pruchase the stock from the comapny, they will recieve the money. if you buy it from a stockholder, the money goes to them. Usually, the company will wire you your share of the companies earnings.

Answer 5

In case of IPO, it does go to company. If you are buying the scrips thru secondary market, it doesnot go to company, it goes to another investor or trader like you, similary while you sell, ur selling to another investor or trader, not to the company