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how do companies get money from being listed publicly
How can a company use money from stock investors when they are constantly being bought and sold?Why does a company pay dividends at all?How does buying stock work when orders are queued while the price is changingHow do share dilution scams make money?Where can I download all stock symbols of all companies “currently listed” and “delisted” as of today?Would cross holding make market capitalization apparently more?how exactly do companies make money from warrants?How can a company use money from stock investors when they are constantly being bought and sold?
.everyoneloves__top-leaderboard:empty,.everyoneloves__mid-leaderboard:empty,.everyoneloves__bot-mid-leaderboard:empty margin-bottom:0;
How do companies get their money from being on the stock market?
I understand the reason a company will list is to raise capital.
Who gives them this money? The stock market is between buyers and sellers themselves right ? So how do companies get their capital?
stocks
asked 9 hours ago
JonathanJonathan
512 bronze badges
add a comment |
How do companies get their money from being on the stock market?
I understand the reason a company will list is to raise capital.
Who gives them this money? The stock market is between buyers and sellers themselves right ? So how do companies get their capital?
stocks
asked 9 hours ago
JonathanJonathan
512 bronze badges
2
Possible duplicate of How can a company use money from stock investors when they are constantly being bought and sold?
– D Stanley
8 hours ago
add a comment |
How do companies get their money from being on the stock market?
I understand the reason a company will list is to raise capital.
Who gives them this money? The stock market is between buyers and sellers themselves right ? So how do companies get their capital?
stocks
asked 9 hours ago
JonathanJonathan
512 bronze badges
How do companies get their money from being on the stock market?
I understand the reason a company will list is to raise capital.
Who gives them this money? The stock market is between buyers and sellers themselves right ? So how do companies get their capital?
stocks
stocks
asked 9 hours ago
JonathanJonathan
512 bronze badges
asked 9 hours ago
JonathanJonathan
512 bronze badges
asked 9 hours ago
JonathanJonathan
512 bronze badges
asked 9 hours ago
JonathanJonathan
512 bronze badges
asked 9 hours ago
JonathanJonathan
512 bronze badges
512 bronze badges
2
Possible duplicate of How can a company use money from stock investors when they are constantly being bought and sold?
– D Stanley
8 hours ago
add a comment |
2
Possible duplicate of How can a company use money from stock investors when they are constantly being bought and sold?
– D Stanley
8 hours ago
2
2
Possible duplicate of How can a company use money from stock investors when they are constantly being bought and sold?
– D Stanley
8 hours ago
Possible duplicate of How can a company use money from stock investors when they are constantly being bought and sold?
– D Stanley
8 hours ago
add a comment |
3 Answers
3
active
oldest
votes
Being listed publicly doesn't get a company any money. Getting the listing is what does it: the company sells new shares in an Initial Public Offering (IPO), the underwriter takes its cut of the proceeds, and whatever is left goes to the company. The shares are then traded, as you say, among buyers and sellers who hope to profit off of changes in the perceived value of the shares. That's sometimes known as the "secondary market"; that name emphasizes that this trading does not involve the initial sale of the shares.
answered 9 hours ago
Pete BeckerPete Becker
3,6281 gold badge12 silver badges16 bronze badges
add a comment |
The common approach to an IPO is for the company to hire an investment banker (IB) who will underwrite the shares (sell the stock to the public). There may be an associated underwriting syndicate.
The IB analyzes the company to determine its value, prepares a prospectus and distributes it to clients. Some IBs do a road show, promoting the company and attempting to sell large blocks of shares to fund managers and financial institutions. Some shares go to retail clients but that tends to be a smaller percentage.
Near the day of the IPO, share price is set. The company receives the cash, less the mark up, which last I knew was a maximum of 5%. How it's divided depends on whether it was a firm commitment or best efforts agreement.
Once public trading begins, transactions are between buyers and sellers.
answered 9 hours ago
Bob BaerkerBob Baerker
25.1k3 gold badges38 silver badges64 bronze badges
1
This doesn't seem to address the question. As far as I understood, the OP was asking "Ok, people buy the stock, but the money goes to the people owning the stock, not the company itself. So how does the company gets the money?" E.g. if bill gates sells a bunch of shares of microsoft for 1B, microsoft does not get any of that money - so how is that different for IPOs?
– Ant
1 hour ago
@Ant This addresses the question perfectly:The company receives the cash. During an IPO, the money from buyers does go to the company.
– only_pro
53 mins ago
1
@only_pro I guess the question is why - I found a company, I have 100% of the shares. Then the company goes public, I sell 50% of them in an IPO, I get a bunch of money, the company gets nothing. I know that the company issues shares and sells them (which essentially means shareholders agree to reinvest some of the proceeds of the sale back into the company) but it needs to be clarified - just "company receives cash" is not an answer
– Ant
50 mins ago
@Ant An IPO does not convert 100% of existing private shares into public shares. It creates new shares, underwritten by a bank, which the public can then buy. This money goes to the company. That's the point of an IPO—to raise a lot of money for a company quickly. In fact, once the IPO begins, owners of private shares aren't allowed to sell them for a while.
– only_pro
42 mins ago
@Ant - Your understanding of an IPO is lacking. The company issues stock for an IPO and the cash (less the investment banker's underwriting costs) goes to the company. As noted by ONLY_PRO, private placement shares are restricted and can't be sold at the time of the IPO. Under SEC Rule 144, restricted shares turn into publicly tradable ones after a holding period of six months. After the waiting period, owners receive reissued shares lacking the restrictive legend stamped on their private placement shares. Feel free to write an Answer detailing what you think the IPO process entails.
– Bob Baerker
32 mins ago
add a comment |
The simple answer is: Before "going public", 100% of the company is owned by the company itself or private shareholders (investors). When the company goes public, some of the shares that were owned by the company are sold in the IPO (Initial Public Offering), and become the first publicly traded shares of the now public company. So your assumption that money changes hands between buyers and sellers is correct, and in this case the corporation itself is the seller.
Once the IPO is complete, public trading is open and the initial buyers are free to trade the stock between themselves or with others, the company itself can choose to sell more of or buy back some of their own stock on the open market. But after the IPO, the price is determined by supply and demand, the company no longer has any say in the price of their stock. It's not uncommon for a company to buy back its own stock if the market value of the company is lower than the company feels it should be.
answered 34 mins ago
little_birdielittle_birdie
1011 bronze badge
New contributor
little_birdie is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |
3 Answers
3
active
oldest
votes
3 Answers
3
active
oldest
votes
active
oldest
votes
active
oldest
votes
Being listed publicly doesn't get a company any money. Getting the listing is what does it: the company sells new shares in an Initial Public Offering (IPO), the underwriter takes its cut of the proceeds, and whatever is left goes to the company. The shares are then traded, as you say, among buyers and sellers who hope to profit off of changes in the perceived value of the shares. That's sometimes known as the "secondary market"; that name emphasizes that this trading does not involve the initial sale of the shares.
answered 9 hours ago
Pete BeckerPete Becker
3,6281 gold badge12 silver badges16 bronze badges
add a comment |
Being listed publicly doesn't get a company any money. Getting the listing is what does it: the company sells new shares in an Initial Public Offering (IPO), the underwriter takes its cut of the proceeds, and whatever is left goes to the company. The shares are then traded, as you say, among buyers and sellers who hope to profit off of changes in the perceived value of the shares. That's sometimes known as the "secondary market"; that name emphasizes that this trading does not involve the initial sale of the shares.
answered 9 hours ago
Pete BeckerPete Becker
3,6281 gold badge12 silver badges16 bronze badges
add a comment |
Being listed publicly doesn't get a company any money. Getting the listing is what does it: the company sells new shares in an Initial Public Offering (IPO), the underwriter takes its cut of the proceeds, and whatever is left goes to the company. The shares are then traded, as you say, among buyers and sellers who hope to profit off of changes in the perceived value of the shares. That's sometimes known as the "secondary market"; that name emphasizes that this trading does not involve the initial sale of the shares.
answered 9 hours ago
Pete BeckerPete Becker
3,6281 gold badge12 silver badges16 bronze badges
Being listed publicly doesn't get a company any money. Getting the listing is what does it: the company sells new shares in an Initial Public Offering (IPO), the underwriter takes its cut of the proceeds, and whatever is left goes to the company. The shares are then traded, as you say, among buyers and sellers who hope to profit off of changes in the perceived value of the shares. That's sometimes known as the "secondary market"; that name emphasizes that this trading does not involve the initial sale of the shares.
answered 9 hours ago
Pete BeckerPete Becker
3,6281 gold badge12 silver badges16 bronze badges
answered 9 hours ago
Pete BeckerPete Becker
3,6281 gold badge12 silver badges16 bronze badges
answered 9 hours ago
Pete BeckerPete Becker
3,6281 gold badge12 silver badges16 bronze badges
answered 9 hours ago
Pete BeckerPete Becker
3,6281 gold badge12 silver badges16 bronze badges
3,6281 gold badge12 silver badges16 bronze badges
add a comment |
add a comment |
The common approach to an IPO is for the company to hire an investment banker (IB) who will underwrite the shares (sell the stock to the public). There may be an associated underwriting syndicate.
The IB analyzes the company to determine its value, prepares a prospectus and distributes it to clients. Some IBs do a road show, promoting the company and attempting to sell large blocks of shares to fund managers and financial institutions. Some shares go to retail clients but that tends to be a smaller percentage.
Near the day of the IPO, share price is set. The company receives the cash, less the mark up, which last I knew was a maximum of 5%. How it's divided depends on whether it was a firm commitment or best efforts agreement.
Once public trading begins, transactions are between buyers and sellers.
answered 9 hours ago
Bob BaerkerBob Baerker
25.1k3 gold badges38 silver badges64 bronze badges
1
This doesn't seem to address the question. As far as I understood, the OP was asking "Ok, people buy the stock, but the money goes to the people owning the stock, not the company itself. So how does the company gets the money?" E.g. if bill gates sells a bunch of shares of microsoft for 1B, microsoft does not get any of that money - so how is that different for IPOs?
– Ant
1 hour ago
@Ant This addresses the question perfectly:The company receives the cash. During an IPO, the money from buyers does go to the company.
– only_pro
53 mins ago
1
@only_pro I guess the question is why - I found a company, I have 100% of the shares. Then the company goes public, I sell 50% of them in an IPO, I get a bunch of money, the company gets nothing. I know that the company issues shares and sells them (which essentially means shareholders agree to reinvest some of the proceeds of the sale back into the company) but it needs to be clarified - just "company receives cash" is not an answer
– Ant
50 mins ago
@Ant An IPO does not convert 100% of existing private shares into public shares. It creates new shares, underwritten by a bank, which the public can then buy. This money goes to the company. That's the point of an IPO—to raise a lot of money for a company quickly. In fact, once the IPO begins, owners of private shares aren't allowed to sell them for a while.
– only_pro
42 mins ago
@Ant - Your understanding of an IPO is lacking. The company issues stock for an IPO and the cash (less the investment banker's underwriting costs) goes to the company. As noted by ONLY_PRO, private placement shares are restricted and can't be sold at the time of the IPO. Under SEC Rule 144, restricted shares turn into publicly tradable ones after a holding period of six months. After the waiting period, owners receive reissued shares lacking the restrictive legend stamped on their private placement shares. Feel free to write an Answer detailing what you think the IPO process entails.
– Bob Baerker
32 mins ago
add a comment |
The common approach to an IPO is for the company to hire an investment banker (IB) who will underwrite the shares (sell the stock to the public). There may be an associated underwriting syndicate.
The IB analyzes the company to determine its value, prepares a prospectus and distributes it to clients. Some IBs do a road show, promoting the company and attempting to sell large blocks of shares to fund managers and financial institutions. Some shares go to retail clients but that tends to be a smaller percentage.
Near the day of the IPO, share price is set. The company receives the cash, less the mark up, which last I knew was a maximum of 5%. How it's divided depends on whether it was a firm commitment or best efforts agreement.
Once public trading begins, transactions are between buyers and sellers.
answered 9 hours ago
Bob BaerkerBob Baerker
25.1k3 gold badges38 silver badges64 bronze badges
1
This doesn't seem to address the question. As far as I understood, the OP was asking "Ok, people buy the stock, but the money goes to the people owning the stock, not the company itself. So how does the company gets the money?" E.g. if bill gates sells a bunch of shares of microsoft for 1B, microsoft does not get any of that money - so how is that different for IPOs?
– Ant
1 hour ago
@Ant This addresses the question perfectly:The company receives the cash. During an IPO, the money from buyers does go to the company.
– only_pro
53 mins ago
1
@only_pro I guess the question is why - I found a company, I have 100% of the shares. Then the company goes public, I sell 50% of them in an IPO, I get a bunch of money, the company gets nothing. I know that the company issues shares and sells them (which essentially means shareholders agree to reinvest some of the proceeds of the sale back into the company) but it needs to be clarified - just "company receives cash" is not an answer
– Ant
50 mins ago
@Ant An IPO does not convert 100% of existing private shares into public shares. It creates new shares, underwritten by a bank, which the public can then buy. This money goes to the company. That's the point of an IPO—to raise a lot of money for a company quickly. In fact, once the IPO begins, owners of private shares aren't allowed to sell them for a while.
– only_pro
42 mins ago
@Ant - Your understanding of an IPO is lacking. The company issues stock for an IPO and the cash (less the investment banker's underwriting costs) goes to the company. As noted by ONLY_PRO, private placement shares are restricted and can't be sold at the time of the IPO. Under SEC Rule 144, restricted shares turn into publicly tradable ones after a holding period of six months. After the waiting period, owners receive reissued shares lacking the restrictive legend stamped on their private placement shares. Feel free to write an Answer detailing what you think the IPO process entails.
– Bob Baerker
32 mins ago
add a comment |
The common approach to an IPO is for the company to hire an investment banker (IB) who will underwrite the shares (sell the stock to the public). There may be an associated underwriting syndicate.
The IB analyzes the company to determine its value, prepares a prospectus and distributes it to clients. Some IBs do a road show, promoting the company and attempting to sell large blocks of shares to fund managers and financial institutions. Some shares go to retail clients but that tends to be a smaller percentage.
Near the day of the IPO, share price is set. The company receives the cash, less the mark up, which last I knew was a maximum of 5%. How it's divided depends on whether it was a firm commitment or best efforts agreement.
Once public trading begins, transactions are between buyers and sellers.
answered 9 hours ago
Bob BaerkerBob Baerker
25.1k3 gold badges38 silver badges64 bronze badges
The common approach to an IPO is for the company to hire an investment banker (IB) who will underwrite the shares (sell the stock to the public). There may be an associated underwriting syndicate.
The IB analyzes the company to determine its value, prepares a prospectus and distributes it to clients. Some IBs do a road show, promoting the company and attempting to sell large blocks of shares to fund managers and financial institutions. Some shares go to retail clients but that tends to be a smaller percentage.
Near the day of the IPO, share price is set. The company receives the cash, less the mark up, which last I knew was a maximum of 5%. How it's divided depends on whether it was a firm commitment or best efforts agreement.
Once public trading begins, transactions are between buyers and sellers.
answered 9 hours ago
Bob BaerkerBob Baerker
25.1k3 gold badges38 silver badges64 bronze badges
answered 9 hours ago
Bob BaerkerBob Baerker
25.1k3 gold badges38 silver badges64 bronze badges
answered 9 hours ago
Bob BaerkerBob Baerker
25.1k3 gold badges38 silver badges64 bronze badges
answered 9 hours ago
Bob BaerkerBob Baerker
25.1k3 gold badges38 silver badges64 bronze badges
25.1k3 gold badges38 silver badges64 bronze badges
1
This doesn't seem to address the question. As far as I understood, the OP was asking "Ok, people buy the stock, but the money goes to the people owning the stock, not the company itself. So how does the company gets the money?" E.g. if bill gates sells a bunch of shares of microsoft for 1B, microsoft does not get any of that money - so how is that different for IPOs?
– Ant
1 hour ago
@Ant This addresses the question perfectly:The company receives the cash. During an IPO, the money from buyers does go to the company.
– only_pro
53 mins ago
1
@only_pro I guess the question is why - I found a company, I have 100% of the shares. Then the company goes public, I sell 50% of them in an IPO, I get a bunch of money, the company gets nothing. I know that the company issues shares and sells them (which essentially means shareholders agree to reinvest some of the proceeds of the sale back into the company) but it needs to be clarified - just "company receives cash" is not an answer
– Ant
50 mins ago
@Ant An IPO does not convert 100% of existing private shares into public shares. It creates new shares, underwritten by a bank, which the public can then buy. This money goes to the company. That's the point of an IPO—to raise a lot of money for a company quickly. In fact, once the IPO begins, owners of private shares aren't allowed to sell them for a while.
– only_pro
42 mins ago
@Ant - Your understanding of an IPO is lacking. The company issues stock for an IPO and the cash (less the investment banker's underwriting costs) goes to the company. As noted by ONLY_PRO, private placement shares are restricted and can't be sold at the time of the IPO. Under SEC Rule 144, restricted shares turn into publicly tradable ones after a holding period of six months. After the waiting period, owners receive reissued shares lacking the restrictive legend stamped on their private placement shares. Feel free to write an Answer detailing what you think the IPO process entails.
– Bob Baerker
32 mins ago
add a comment |
1
This doesn't seem to address the question. As far as I understood, the OP was asking "Ok, people buy the stock, but the money goes to the people owning the stock, not the company itself. So how does the company gets the money?" E.g. if bill gates sells a bunch of shares of microsoft for 1B, microsoft does not get any of that money - so how is that different for IPOs?
– Ant
1 hour ago
@Ant This addresses the question perfectly:The company receives the cash. During an IPO, the money from buyers does go to the company.
– only_pro
53 mins ago
1
@only_pro I guess the question is why - I found a company, I have 100% of the shares. Then the company goes public, I sell 50% of them in an IPO, I get a bunch of money, the company gets nothing. I know that the company issues shares and sells them (which essentially means shareholders agree to reinvest some of the proceeds of the sale back into the company) but it needs to be clarified - just "company receives cash" is not an answer
– Ant
50 mins ago
@Ant An IPO does not convert 100% of existing private shares into public shares. It creates new shares, underwritten by a bank, which the public can then buy. This money goes to the company. That's the point of an IPO—to raise a lot of money for a company quickly. In fact, once the IPO begins, owners of private shares aren't allowed to sell them for a while.
– only_pro
42 mins ago
@Ant - Your understanding of an IPO is lacking. The company issues stock for an IPO and the cash (less the investment banker's underwriting costs) goes to the company. As noted by ONLY_PRO, private placement shares are restricted and can't be sold at the time of the IPO. Under SEC Rule 144, restricted shares turn into publicly tradable ones after a holding period of six months. After the waiting period, owners receive reissued shares lacking the restrictive legend stamped on their private placement shares. Feel free to write an Answer detailing what you think the IPO process entails.
– Bob Baerker
32 mins ago
1
1
This doesn't seem to address the question. As far as I understood, the OP was asking "Ok, people buy the stock, but the money goes to the people owning the stock, not the company itself. So how does the company gets the money?" E.g. if bill gates sells a bunch of shares of microsoft for 1B, microsoft does not get any of that money - so how is that different for IPOs?
– Ant
1 hour ago
This doesn't seem to address the question. As far as I understood, the OP was asking "Ok, people buy the stock, but the money goes to the people owning the stock, not the company itself. So how does the company gets the money?" E.g. if bill gates sells a bunch of shares of microsoft for 1B, microsoft does not get any of that money - so how is that different for IPOs?
– Ant
1 hour ago
@Ant This addresses the question perfectly:
The company receives the cash. During an IPO, the money from buyers does go to the company.– only_pro
53 mins ago
@Ant This addresses the question perfectly:
The company receives the cash. During an IPO, the money from buyers does go to the company.– only_pro
53 mins ago
1
1
@only_pro I guess the question is why - I found a company, I have 100% of the shares. Then the company goes public, I sell 50% of them in an IPO, I get a bunch of money, the company gets nothing. I know that the company issues shares and sells them (which essentially means shareholders agree to reinvest some of the proceeds of the sale back into the company) but it needs to be clarified - just "company receives cash" is not an answer
– Ant
50 mins ago
@only_pro I guess the question is why - I found a company, I have 100% of the shares. Then the company goes public, I sell 50% of them in an IPO, I get a bunch of money, the company gets nothing. I know that the company issues shares and sells them (which essentially means shareholders agree to reinvest some of the proceeds of the sale back into the company) but it needs to be clarified - just "company receives cash" is not an answer
– Ant
50 mins ago
@Ant An IPO does not convert 100% of existing private shares into public shares. It creates new shares, underwritten by a bank, which the public can then buy. This money goes to the company. That's the point of an IPO—to raise a lot of money for a company quickly. In fact, once the IPO begins, owners of private shares aren't allowed to sell them for a while.
– only_pro
42 mins ago
@Ant An IPO does not convert 100% of existing private shares into public shares. It creates new shares, underwritten by a bank, which the public can then buy. This money goes to the company. That's the point of an IPO—to raise a lot of money for a company quickly. In fact, once the IPO begins, owners of private shares aren't allowed to sell them for a while.
– only_pro
42 mins ago
@Ant - Your understanding of an IPO is lacking. The company issues stock for an IPO and the cash (less the investment banker's underwriting costs) goes to the company. As noted by ONLY_PRO, private placement shares are restricted and can't be sold at the time of the IPO. Under SEC Rule 144, restricted shares turn into publicly tradable ones after a holding period of six months. After the waiting period, owners receive reissued shares lacking the restrictive legend stamped on their private placement shares. Feel free to write an Answer detailing what you think the IPO process entails.
– Bob Baerker
32 mins ago
@Ant - Your understanding of an IPO is lacking. The company issues stock for an IPO and the cash (less the investment banker's underwriting costs) goes to the company. As noted by ONLY_PRO, private placement shares are restricted and can't be sold at the time of the IPO. Under SEC Rule 144, restricted shares turn into publicly tradable ones after a holding period of six months. After the waiting period, owners receive reissued shares lacking the restrictive legend stamped on their private placement shares. Feel free to write an Answer detailing what you think the IPO process entails.
– Bob Baerker
32 mins ago
add a comment |
The simple answer is: Before "going public", 100% of the company is owned by the company itself or private shareholders (investors). When the company goes public, some of the shares that were owned by the company are sold in the IPO (Initial Public Offering), and become the first publicly traded shares of the now public company. So your assumption that money changes hands between buyers and sellers is correct, and in this case the corporation itself is the seller.
Once the IPO is complete, public trading is open and the initial buyers are free to trade the stock between themselves or with others, the company itself can choose to sell more of or buy back some of their own stock on the open market. But after the IPO, the price is determined by supply and demand, the company no longer has any say in the price of their stock. It's not uncommon for a company to buy back its own stock if the market value of the company is lower than the company feels it should be.
answered 34 mins ago
little_birdielittle_birdie
1011 bronze badge
New contributor
little_birdie is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |
The simple answer is: Before "going public", 100% of the company is owned by the company itself or private shareholders (investors). When the company goes public, some of the shares that were owned by the company are sold in the IPO (Initial Public Offering), and become the first publicly traded shares of the now public company. So your assumption that money changes hands between buyers and sellers is correct, and in this case the corporation itself is the seller.
Once the IPO is complete, public trading is open and the initial buyers are free to trade the stock between themselves or with others, the company itself can choose to sell more of or buy back some of their own stock on the open market. But after the IPO, the price is determined by supply and demand, the company no longer has any say in the price of their stock. It's not uncommon for a company to buy back its own stock if the market value of the company is lower than the company feels it should be.
answered 34 mins ago
little_birdielittle_birdie
1011 bronze badge
New contributor
little_birdie is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |
The simple answer is: Before "going public", 100% of the company is owned by the company itself or private shareholders (investors). When the company goes public, some of the shares that were owned by the company are sold in the IPO (Initial Public Offering), and become the first publicly traded shares of the now public company. So your assumption that money changes hands between buyers and sellers is correct, and in this case the corporation itself is the seller.
Once the IPO is complete, public trading is open and the initial buyers are free to trade the stock between themselves or with others, the company itself can choose to sell more of or buy back some of their own stock on the open market. But after the IPO, the price is determined by supply and demand, the company no longer has any say in the price of their stock. It's not uncommon for a company to buy back its own stock if the market value of the company is lower than the company feels it should be.
answered 34 mins ago
little_birdielittle_birdie
1011 bronze badge
New contributor
little_birdie is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
The simple answer is: Before "going public", 100% of the company is owned by the company itself or private shareholders (investors). When the company goes public, some of the shares that were owned by the company are sold in the IPO (Initial Public Offering), and become the first publicly traded shares of the now public company. So your assumption that money changes hands between buyers and sellers is correct, and in this case the corporation itself is the seller.
Once the IPO is complete, public trading is open and the initial buyers are free to trade the stock between themselves or with others, the company itself can choose to sell more of or buy back some of their own stock on the open market. But after the IPO, the price is determined by supply and demand, the company no longer has any say in the price of their stock. It's not uncommon for a company to buy back its own stock if the market value of the company is lower than the company feels it should be.
answered 34 mins ago
little_birdielittle_birdie
1011 bronze badge
New contributor
little_birdie is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
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edited 25 mins ago
answered 34 mins ago
little_birdielittle_birdie
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answered 34 mins ago
little_birdielittle_birdie
1011 bronze badge
answered 34 mins ago
little_birdielittle_birdie
1011 bronze badge
1011 bronze badge
New contributor
little_birdie is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
New contributor
little_birdie is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
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Possible duplicate of How can a company use money from stock investors when they are constantly being bought and sold?
– D Stanley
8 hours ago