Is money that we invest in stockmarket, sacrificer?

Question

Say, to solve to manage the complecity of ownership, It invents the stockmarket, thus to make change ownership efficiently, thus in this matter, then there's two capital for 1 company, right? the one that really useful to buy company assets, to pay wages, cash flow, etc. And the other one, that is for sole purpose efficient ownership changes, thus it makes a lot pools of money cannot be used physically. Thus the latter, could we call sacrifice money? :)


I hope you get what I mean,
10 pts. for good or detailed answer.

Answer 1

Say what?

When a company is capitalized, that means money for the equipment and wages and operating expense is brought into the firm. When a stockholder sells shares in the company to another, that share interest merely changes ownership. The profit or loss on the sale of the stock does not add to, or delete from, the ability of the company to do its business unless the company is the one selling the shares.

For instance, company XYZ goes public and offers 10 million shares at a $10 par. It is hoping that all will be sold and they will have $100 million to work with. Say the founder buys 2 million shares, coughing up some $20 million, but then decides to sell 1 million shares on the open market. If the company is interesting and people are bidding up stocks faster than they are being released (sometimes they are sold in periodic batches, it helps support the price of the stock), then should the bidding be something like $12 for the stock after the founder's shares have entered the sales queue, then the next buyers of the stock will either be buying from the company's open issue or from folks like the founder that are selling stuff they recently bought. If you bought 2 million shares (fat cat that you are, you can afford to), you may have bought a million of the company's offering and a million that the founder was offering. Of the $24 million that you shelled out for your stake in the new company, the company may have gained an extra $2 million, but so did the founder. The extra $2 million the company made by selling you a million shares for $12 a share will go for wages and such, but the extra $2 million sold by the founder go to the founder's new yacht or whatever.

There is no "sacrifice". The closest thing to a "sacrifice" is if you then donated some of that stock to a church or something because of a personal desire to offer some of your largesse to the work or worship of your deity.

Answer 2

Never heard the term sacrifice money but I think you are trying to say there are 2 markets for stocks, which is true.

There is the Primary Market (IPOs and new Stock offerings) where companies get the procedes (money) to invest in their businesses.

And there is the Secondary Market, which is the market we think about when we talk about WallStreet (shares are traded between owners). And yes the secondary market serves to provide liquidity (easy SALE and PURCHASE) for copany ownership. Without it the owners who purchased shares in an IPO would be locked-in similar to a Private Equity deal.

The secondary market also serves to provide continual valuations on public companies. Therefore making the market more efficient and helping to set prices for future Primary offerings by the companies.

Answer 3

So what you are suggesting is that there are two stocks in a given company/corportation and that what the average stock purchaser can buy is the second one, the sacrificial one, so that if the company has serious problems, their prime stock is insulated against losing value or assets of major stockholders? Interesting, not sure of how to check that out or how legal it is for companies to do that. But if these companies just let the secondary market go bust, wouldn't that make their companies still more insecure?

Answer 4

good question! here is another way to think about a stock investment: in effect, you are giving your money to the company with a shared expectation that the company will use your money to increase earnings. you will be repaid your money based upon the increase.

but, you also run a risk -- as does the company -- that earnings will decrease, meaning that both you and the company will lose money. therefore, be conservative!

sorry, the above is not technical, but it is another point of view that i hope will help you. also, i think the widipedia article will give you more details.

good luck!

Answer 5

by no ability heard the term sacrifice money yet i think of you attempt to declare there are 2 markets for shares, that's genuine. there is the accepted marketplace (IPOs and new inventory alternatives) the place agencies get the procedes (money) to invest of their agencies. and there is the Secondary marketplace, that's the marketplace we expect of roughly as quickly as we communicate approximately WallStreet (shares are traded between proprietors). And sure the secondary marketplace serves to furnish liquidity (elementary SALE and purchase) for copany possession. with out it the proprietors who offered shares in an IPO would be locked-in comparable to a private fairness deal. The secondary marketplace additionally serves to furnish continual valuations on public agencies. subsequently making the marketplace extra valuable and assisting to set fees for destiny accepted alternatives via the agencies.

Answer 6

You may be onto something brilliant, but your grammar and spelling are terrible.