Who pays a shareholder money when they cash in shares?
Who pays a shareholder money when they cash in shares? For example, if I am trying to sell back 10 shares of "company x" for $50 that I originally bought for $40, who gives me the $40 plus the difference that I earned when I am cashing out? Does "company x" have to pay the $50 a share that I am cashing out? Or does someone else in the market who wants my shares buy them from me. If someone else buys my shares, then wouldn't the price of the stock be irrelevant to "company x" once it makes its money from its IPO?
The shares are sold to someone else in the marketplace who is buying at that time. The share price is relevant after an IPO because the company may seek to raise additional equity by selling more shares if management feels it is currently overvalued. Additionally, compensation for management will include a significant proportion of shares or options, aligning their goals with those of shareholders.
You need to google how the stock market works. That is a ridiculous question.
Didn't you play the stock market game in like 5th grade>?
Lol when I saw the title to this post I thought it was a joke.......If you buy a house for 100K and its now worth 200K when you SELL IT TO SOMEONE ELSE, who give your the 200K..........the buyer.
http://money.howstuffworks.com/personal-finance/financial-planning/stoc…
This made my fucking day
I am starting to think this was a serious question,... "cash in on shares" HA
All WSO's cred goes down the drain with 4th grade posts like these, but at least I cracked up each time I re-read the original question
jesus christ. shoot me now please. or at least tell me youre a freshman in high school reading these boards and not legitimately in college studying finance or economics. if youre actually looking at MBAs i fear for you
because, in all serious, everyone knows the nasdaq stork brings you your money when you cash it in to him
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