Most people have absolutely no clue how stocks in the stock market work.
Before a company "IPOs", basically a launch valuation is determined by (get this) the angel investors themselves. The launch valuation is based on some future market valuation of the company that may or may not ever happen. The stock is basically "insta-mined" and the lions share (99%) of the shares go into the hands of the owners, employees, and original investors of the company. The remaining tiny float hits the exchange market. From there, these shares get mega-leveraged up and then robo-traded by bots. That's why the needle on most large cap stocks barely moves over a decade or two.
You have to then pay market value for the stock, whether or not you agree with its initial valuation. This in turn makes the original investors instant paper millionaires or in some cases billionaires. Lucky for you, they have a lock up period and can't just instantly dump on your head. But they will eventually sell their shares over time.
The value of the stock you have bought can decrease if the company "issues" more stock shares. This is called dilution. I believe this also happens covertly when huge Wall Street and banking entities and investors want to get more exposure to a stock. The issuer can "print" more on the down low and the public never even hears about it.
When you buy a company stock, you are not getting access to the actual stock. You are buying from a pool of shares allocated to market makers. The stock is not something that you can even "own" directly. You are basically leasing an IOU from a market maker. You will never get access to a stock market certificate of ownership. Ever. Even if you tried.
Market makers are free to let other funds "borrow" their (and thus your) stocks as collateral for other investments(!) The stocks you supposedly have a claim to can be hypothecated and re-hypothecated over and over again. Think fractional reserve for stocks. This is extremely dangerous and irresponsible, but all perfectly legal.
When multiple companies have claim to the same exact shares of stock, these are called "phantom shares." This is completely illegal, but is happening a lot more than people know. It is common knowledge in the Wall Street world though.
When your stock that you supposedly own crashes, and you have stops set, guess who gets paid their money first on the way down? Not you little guppy.
If the funds that "borrowed" your stock have a sudden liquidity crisis, guess who takes the haircut first to pay back the losses? Yes, a bail-in can happen with your stock portfolio, and it is all perfectly legal. Go read the fine print on your broker agreement. It is all there.
This is why the Bitcoin market may actually be the most honest and transparent market on the planet right now.
Now the ICO token market. Yeah... that is another story... a complete scam... the tulip bulb analogy fits there.
Before a company "IPOs", basically a launch valuation is determined by (get this) the angel investors themselves. The launch valuation is based on some future market valuation of the company that may or may not ever happen. The stock is basically "insta-mined" and the lions share (99%) of the shares go into the hands of the owners, employees, and original investors of the company. The remaining tiny float hits the exchange market. From there, these shares get mega-leveraged up and then robo-traded by bots. That's why the needle on most large cap stocks barely moves over a decade or two.
You have to then pay market value for the stock, whether or not you agree with its initial valuation. This in turn makes the original investors instant paper millionaires or in some cases billionaires. Lucky for you, they have a lock up period and can't just instantly dump on your head. But they will eventually sell their shares over time.
The value of the stock you have bought can decrease if the company "issues" more stock shares. This is called dilution. I believe this also happens covertly when huge Wall Street and banking entities and investors want to get more exposure to a stock. The issuer can "print" more on the down low and the public never even hears about it.
When you buy a company stock, you are not getting access to the actual stock. You are buying from a pool of shares allocated to market makers. The stock is not something that you can even "own" directly. You are basically leasing an IOU from a market maker. You will never get access to a stock market certificate of ownership. Ever. Even if you tried.
Market makers are free to let other funds "borrow" their (and thus your) stocks as collateral for other investments(!) The stocks you supposedly have a claim to can be hypothecated and re-hypothecated over and over again. Think fractional reserve for stocks. This is extremely dangerous and irresponsible, but all perfectly legal.
When multiple companies have claim to the same exact shares of stock, these are called "phantom shares." This is completely illegal, but is happening a lot more than people know. It is common knowledge in the Wall Street world though.
When your stock that you supposedly own crashes, and you have stops set, guess who gets paid their money first on the way down? Not you little guppy.
If the funds that "borrowed" your stock have a sudden liquidity crisis, guess who takes the haircut first to pay back the losses? Yes, a bail-in can happen with your stock portfolio, and it is all perfectly legal. Go read the fine print on your broker agreement. It is all there.
This is why the Bitcoin market may actually be the most honest and transparent market on the planet right now.
Now the ICO token market. Yeah... that is another story... a complete scam... the tulip bulb analogy fits there.
it depends on the kind of stock ~ shell plays are the best imo peeps take old cusips and put a real existing company with assets into it = instant moon $$$
weeeeehttps://www.investopedia.com/articles/stocks/09/introduction-reverse-mergers.asp?lgl=af-top-textlink-baseline
