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    khamanthony's Avatar
    khamanthony Posts: 1, Reputation: 1
    New Member
     
    #1

    Jul 21, 2010, 11:27 AM
    What would happen if 1 mil. Investors bought 1 share of the company at the same time?
    For example, If I manage to organize 1 million investors to buy a share of a company that was currently priced at 1 dollar at the same time, would there be any significant consequences with the company and the share prices? Would there a dramatic difference among smaller companies than large companies etc. etc.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
     
    #2

    Jul 21, 2010, 11:42 AM

    A free market is based on supply and demand. If demand increased for a company's shares, then its likely the price would go up. If the demand increased while the supply decreased, the price might go even higher.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #3

    Jul 21, 2010, 01:28 PM

    Remember that whenever someone buys a share of stock, someone else has sold it. So for the miilion investors to buy one share all at once, there have to be existing investors with 1 million shares who agree to sell. For large companies that typically have several milllion stock transactions per day it's not a big deal (Exxon-Mobil's volume today is about 25 million shares). For small companies that typically do a lot less than a million shares each day the price would go through the roof. If I was aware of your scheme ahead of time I could cheat by buying a bunch of shares the day before, so I could sell them to you and your fellow conspirators on the day you all step in to buy.
    excon's Avatar
    excon Posts: 21,482, Reputation: 2992
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    #4

    Jul 21, 2010, 02:06 PM

    Hello k:

    Ebaines is right. They don't sell one share at a time, so the exchange would wait till all million of you gathered together in large groups, and started to buy. Even with a large company like Exxon, a purchase like that is liable to raise the stock a few points. Then if there's no reason for the stock to have risen other than that purchase, the price will go down again.

    excon

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