So companies who are probably owned by a group of people sell some or all of their stock why?

Question

I'm sorry I JUST HAVE A HARD time with this business stuff it hurts my head lol...


Thanks all

Answer 1

Stock is nothing but ownership. So if someone sells stock, they are just transferring ownership to someone else. There are many reasons why owners would want to reduce or eliminate their stake in a company. Maybe they need the money. Maybe they do not have confidence in the company's future (i.e. they suspect the current stock price will not be sustained). Maybe they know the next product is doomed to fail (this would be trading on inside information, which is illegal, but hard to prove, so somewhat common).

Answer 2

Are you talking about a small partnership going public?? If that's the question, it would be done in order to create a cash inflow for the owners, the company itself, or both. This might be done if the company wants to mount a large expansion and needs cash to do so; or if some of the principles want to cash out part of their ownership.

Answer 3

You can't eat stock certificates. ~