Company Shares Question 2?

Question

If people want to sell their shares but no-one wants to buy them then what do those shareholders do?

Also if no-one wants to trade at all in a company, then what happens next and what about the money the company made from the initial share offering at the start?

Thanks x

Answer 1

Part 1, I am not sure.

Part 2, the money from the initial offering is used by the company as it sees fit. It has nothing to do with whether people will trade or not.

If more people do want to invest a company can release shares that have been authorized and unsold or (if they have sold all that were authorized) they can request to get another authorization for shares and notify their current stockholders that they will be creating more shares and selling them on the market.

Answer 2

You need to understand how share trading works.

Basically it's like eBay .. you offer your shares for sale and the price you get depends on what the buyers are willing to pay.

If there are no buyers for a share, then the value of that share is 'zero' = i.e. the shares are worthless.

The ONLY circumstances in which the shares will become worthless is when the Company is bankrupt (if the company has ANY assets then someone WILL offer to buy the shares at SOME price above zero)

Answer 3

One of the risks investors assume when buying shares in a company is the liquidity risk. However, some companies do incorporate into their Articles of Association a clause enabling shareholders to demand from the company (or the issuer) to buy back the shares. In this case, the company may either hold the shares as treasury stock, or cancel and redeem them, or re-issue the shares at some point in the future.

Answer 4

If no-one is willing to purchase the shares (assuming this company is listed on a stock exchange) the shareholders have no recourse but to hold on to them.

If this is actually the case the company could become "de-listed" from the stock exchange and the shares would be worthless. If the company were delisted, depending on your country of taxation, you would be able to claim the amount paid for the shares as a capital loss.

Answer 5

often interior the long term it particularly is extra effective to unfolded your threat between multiple shares because of the fact even the terrific investors make undesirable calls specially circumstances. you will lose somewhat if one inventory takes to the air and the different would not, yet interior the long term you're extra effective off. it particularly is like taking part in poker. you do no longer bypass all in in basic terms for the reason which you have 2 aces; somebody on the table could get a flush.

Answer 6

1. They have to wait for a buyer.