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How many companies/stocks actually need your money to continue operations?


How many companies/stocks actually have enough money that stocks could go to zero and they would still keep going and still make money hand over fist from their continuing operations or investments?

The two primary ways a company can raise funds are through the sale of stocks or borrowing. Borrowing has to be paid back. Stock issuance is essentially selling somebody a small piece of the company.

The only time a company gets money from the sale of stock is when they sell it direct to the public. This is done either as in "initial public offering (aka IPO)" or a special stock sale to raise funds.

Most of the stock trading that goes on is from existing shares in the market. These shares represent a small fractional ownership of the actual comany. Their value is based on the market perception of their worth (company earnigs, earnings growth, cash flow, balance sheet, etc...)

If a company is doing well by growing and making money, this should be reflected in the stock price. The stock price would not go to zero if a company were doing well - rather, it would increase as the total value of the company increases.

I hope that clarifies things a bit. There is a lot that can be learned about stock - but I hope that this helps to clarify your particular question.

The market price of the stock is not directly related to the current financial health of the company. It does, however, reflect a market sentiment on future earnings potential.

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