How a Company Benefits from the Stock Market

Trading 101: How a Company Benefits from the Stock Market

This is a bit of a more advanced topic, so make sure you first know what the stock market is and how it works before proceeding with this video. Assuming you have that foundation, then let’s get a bit more in-depth about the stock market; in particularly, how a company benefits after the initial sale of shares.

[rosariolaspina]

Finally someone who really understands the stock market to answer such a simple question!!

[deepshulpradeep]

Wow, this cleared up so much confusion. Well explained!

[christopherf.]

Thank you! You explained this perfectly for me to understand the concept. I've been wondering this question for a while now. I am new to the stock market and been learning loads to better understand the market.

[jasonoppong]

1.So an IPO a company won’t give all it’s shares- and what determines price of 1 unit of IPO share
2. When the company decides to sell rest of their shares or use remaining shares to buy company I’m assuming this then subsequently decreases stock price

[johnconnor]

I always thought about this question and you helped to clarify this a lot. Thank you

[AlejandroVargas-mhbt]

The intrinsic value doesn’t change, so I believe you are talking about price not value. Since to value a company you need to take into consideration the future cash flows but very good explanation.

[ShantanuSaxena]

This video helped me a lot in clearing out some confusions. Thank you!

[kamikazz]

correct me if i am mistaken but one thing u have missed, say on the initial offering the owners offered 20% of the company at 20$/share

after 2 year once the shares reach 45$ the company owners can offer another percentage say 10% for the public and therefore making money by "selling" 10% of their company

[misrin]

Hi Clay,
Thank you for your videos, I appreciate you making things simple and easy to understand.

Something is not adding up to me regarding how a company can determine the number of shares and at what price when they first go public. Also, is there a limit on how many stocks they can issue? Does issuing more stock dilutes the value of existing stocks like printing money causes inflation, releasing more stocks may cause the price to go down??
Can you shed some light on this?? Thank you

[HyderabadiHustler]

Thank you! You made me much about why " BRANDING, ONLINE REPUTATION MANAGEMENT & MARKETING" of the performance of the company for the company valuation.

[ShockwavesFTW]

Great video, very concise. Couple questions if you (or anyone else) wouldn't mind answering:

* Can a company issue 100% of it's shares? And does that actually happen/have any benefit to it?

* Lets say company ABC releases 100K shares in their IPO. Can that company release more shares? Or do those original shares just get split and the price gets diluted? That part always confused me.

[sandmann]

Exactly what I was looking for. Thank you!

[fdggfgdfgd]

Ok question 1. What is the stock market ? And why does the government exist?

[fabio]

Perhaps the most important question around stocks which most people don't know the answer of. Well done 👏

[carlosmonte]

Also encourages loayalty using stock and option compensation in high positions with long lockup periods

[ARXCREATIONS]

So the conclusion is stocks only determine the value of the company.
And these 2 types of market does only these things.
1. IPO - To raise capital for operations of the company.
2. Secondary market - To determine the value of the company.
Am I right?

[deanlegomina]

So, the main point regarding that question would be that companies don't sell all their stocks at IPO but can sell the rest later to gain more capital or can issue more stocks to get additional capital, right?

[dsolis]

When a company issues their balance sheet the section of “Cash and cash equivalents” also lists the shares they own of them self and other companies? Because if that’s the case many companies hold less cash than what they actually have. Is there a way of knowing how much in that section is shares or dollar?

[kashishhgoel]

Amazing Video!! This is just the thing I was looking for. Thank you.

[johnmanandhar]

I have a question
How does the performance of the company affect the price of the stock?
For eg we say that if the company is not doing well than if the price of the share of that company is high we consider it overvalued.. But why?
How can the performance of the company affect the price of the share?