Hey guys,
I've been toying around with the various markets on and off for a few years now. I am far from an 'expert', but i know how to find my way around a basic stock summary, and have a running (though limited) understanding of most of the available financial instruments available to investors. My question, or rather 'questions' are not about trading strategy or market analysis and such. Instead, I was hoping someone could lend me a better insight as to the 'back end mechanics' of how the market/company relationship works. Bear with me as I try to clarify my question: Strip away all of the analysis, charts, ratios, strategies, etc... how do companies and stocks operate? A company goes public. Who chooses which market they are traded on? How is the initial price of the stock calculated? How much of the company is public, and how much is still owned by the institution itself? How many shares are made available for sale? Who determines how many shares are available for sale? Can a company increase/decrease the number of shares available for purchase? How are the Bid/Ask prices determined, and who determines them? Is it possible for a public company to go private? If so, how does that affect the market, and the company's investors? Do the investors get a return if the company goes private? How is that return calculated and where does it come from? We all know that company performance affects the value of the stock, but how does the value of the stock affect the performance of the company: When an investor buys shares in a company, does the company get to use any of that money for operating expenses/internal investments such of product development or expansion? Inversly, when a company's stocks are shorted, does the company loose money? What happens if there is a lack of buyers or sellers: If I want to sell shares in a company, but there are no buyers, what happens? am I stuck with my unwanted shares? The same question applies, were i trying to buy shares, but there are no sellers. When it comes to shorting stocks, must i borrow from a broker, or is it possible to borrow from say, a friend? ...random shares floating around in cyberspace? Is it even possible for such random un-owned shares to exist? Why would said broker/friend goodwillingly loan out their shares with the understanding that they are effectively loosing networth (assuming of course that the stock value does in fact go down)?
I know that is a lot of questions to ask - i hope i have not overwhelmed everyone. Unfortunately, there are thousands of resources that can explain the market from an investors perspective, but very few that can explain it from the exchange or company perspective...
I've been toying around with the various markets on and off for a few years now. I am far from an 'expert', but i know how to find my way around a basic stock summary, and have a running (though limited) understanding of most of the available financial instruments available to investors. My question, or rather 'questions' are not about trading strategy or market analysis and such. Instead, I was hoping someone could lend me a better insight as to the 'back end mechanics' of how the market/company relationship works. Bear with me as I try to clarify my question: Strip away all of the analysis, charts, ratios, strategies, etc... how do companies and stocks operate? A company goes public. Who chooses which market they are traded on? How is the initial price of the stock calculated? How much of the company is public, and how much is still owned by the institution itself? How many shares are made available for sale? Who determines how many shares are available for sale? Can a company increase/decrease the number of shares available for purchase? How are the Bid/Ask prices determined, and who determines them? Is it possible for a public company to go private? If so, how does that affect the market, and the company's investors? Do the investors get a return if the company goes private? How is that return calculated and where does it come from? We all know that company performance affects the value of the stock, but how does the value of the stock affect the performance of the company: When an investor buys shares in a company, does the company get to use any of that money for operating expenses/internal investments such of product development or expansion? Inversly, when a company's stocks are shorted, does the company loose money? What happens if there is a lack of buyers or sellers: If I want to sell shares in a company, but there are no buyers, what happens? am I stuck with my unwanted shares? The same question applies, were i trying to buy shares, but there are no sellers. When it comes to shorting stocks, must i borrow from a broker, or is it possible to borrow from say, a friend? ...random shares floating around in cyberspace? Is it even possible for such random un-owned shares to exist? Why would said broker/friend goodwillingly loan out their shares with the understanding that they are effectively loosing networth (assuming of course that the stock value does in fact go down)?
I know that is a lot of questions to ask - i hope i have not overwhelmed everyone. Unfortunately, there are thousands of resources that can explain the market from an investors perspective, but very few that can explain it from the exchange or company perspective...
