Stockmarket, IPO: money goes to company, later: stocks & money just change hands between investors?
Francoise asks:
In stock market, first the money goes to company who issues it (IPO), there’s no real deposit of money in the market right?
In stock market, first the money goes to company who issues it (IPO), there’s no real deposit of money in the market right?
Like wall street the only things they have is list of stocks, list of who owns by how much?
All the money goes to investor, when the stocks change hands?
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Most of the money goes to the issuing company. The investment banks that underwrite the offering get something in fees and price gains. The company does care about its stock price if they make a secondary offering or use their stock to buy another company. When stocks change hands the brokers make money from commissions and the bid-ask spread.
If you want to buy a stock you have to deposit your REAL CASH in a REAL BANK.
From there you can move it to your brokerage account and if you buy a stock your money moves to somebody else’s brokerage account.
for the most part, yes, you are right. For IPO, the company & owners get most of the money. You are leaving out the important folks like the bankers that made all this happen. They get fees on bringing the company public.
Wall street: the brokerage companies have buyers & sellers & charge a fee to each one. Any profit or loss goes to the seller.