BoatBanter.com - View Single Post - economist blames wall street for collapse

Canuck57[_9_]

On 09/05/2010 1:45 PM, wrote:
On Sun, 09 May 2010 14:45:59 -0400, wrote:

really? ever sell any stock?

Yes, just last week and because of that I was part of the run on the
market that crashed the value of those stocks.

The fact remains that stock prices are based on what people are
buying, when they sell that "value" quickly disappears.

If there are a million shares of a stock that is selling for a buck
each you could say there was a million dollars worth of value out
there but if somebody actually tried to cash in more than a small
percentage of that stock it would quickly be a 50 cent stock.
In that regard the value is just an illusion.

hmm...it seems you dont know WHY companies are even ON wall street.
they are there for capitalization....looking for money to invest in
their companies. if wall street drops by a trillion, their
equty...their ability to raise money...drops by a trillion

Perhaps you are the one who doesn't understand how stocks work. When a
company offers shares they get all the money they are going to get
right then. After that the stocks are just baseball cards that trade
without the company seeing another dime. They can sell more stock but,
again, it is a one time shot.
Companies do hold back stock and call it an asset but that is really
just a bookkeeping trick.
You have guys like Bill Gates who hold most of their billions in
company stock but they can't really sell it without depressing the
price.

I wouldn't call it a trick. Credits == debits, assets == liabilities.
Or the books are cooked. Might be anyways, but that isn't the point.
There is a method to why financials were setup that way to give a more
accruate valuation of what part of the equity is share holders and not
bank/debt. It affects P/E and debt ratios.

--
There is a sucker born every minute, liberals and our politicians are
counting on it.