i know im buying shares in a company, and a portion pays for the transaction, and the value of the company increases as more stocks are purchased,,,,,,,,but where does the money go?....it isnt simply deposited into the company bank account......
2006-12-07 06:41:42 · 8 answers · asked by bush deathgrip 2 in Business & Finance ➔ Investing
It depends. If you purchased the shares through an IPO initiated by the company then yes the money, or at least part of it anyway goes to the company. Part also goes to the underwriter of the IPO. If you purchased the shares on the secondary market, the money goes to the person who sold you the shares. In 99.44% of the cases, that is where the money goes less brokerage commissions which of course go the the brokers. Oh yes, the stock exchange also gets a cut.
2006-12-07 09:18:18 · answer #1 · answered by Anonymous · 0⤊ 0⤋
When you buy stock, the money goes to the person who sold it to you. The value of the company, however, does not "increase as more stocks are purchased"; the number of shares outstanding remains constant since IPO. To sell additional shares, companies must conduct a new offering (usually called secondary or seasoned offering)...
2006-12-07 07:50:32 · answer #2 · answered by NC 7 · 0⤊ 0⤋
If you are buying in an Initial Public Offering, yes. Common market trades, however, buyer pays the seller, period (after commissions or such fees of course). If the company happens to be the seller, then the company gets the money, that is true, but most trades are between private and institutional stockholders and the company only knows when shares change registry (like if you want to get the stock certificate) and they may get part of the fee for them to issue the certificate.
2006-12-07 06:59:15 · answer #3 · answered by Rabbit 7 · 0⤊ 0⤋
No, the money doesn't go to the company. When you buy shares in a company, the money goes to the person selling the shares you are purchasing.
2006-12-07 06:48:53 · answer #4 · answered by jseah114 6 · 0⤊ 0⤋
On IPO Day: To the company you're buying stock in.
Every day thereafter: To the individual listing his shares for sale. The word 'auction' really is a good word, because it is just like you bought or sold something on e-Bay ; the product just happens to be shares in a company.
2006-12-07 08:22:43 · answer #5 · answered by alien~ 5 · 0⤊ 0⤋
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2016-11-24 21:21:45 · answer #6 · answered by ? 4 · 0⤊ 0⤋
It goes into the pockets of the dude or dame that sold you his shares.
2006-12-07 07:44:58 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Your money goes to the shareholder selling you his share.
2006-12-07 06:49:29 · answer #8 · answered by Anonymous · 0⤊ 1⤋