4 ms·
Months to years to liquidate stock? For most people? I can't imagine selling a position would have any influence on price until it's a significant percentage o
by auxym 9y ago
Months to years to liquidate stock? For most people?
I can't imagine selling a position would have any influence on price until it's a significant percentage of the market cap. The median cap of the Russell 2000 (an american small cap index) is 809 M [0].
Do most people really have multi-million positions in a single small cap company?
https://en.wikipedia.org/wiki/Russell_2000_Index https://en.wikipedia.org/wiki/Russell_2000_Index
- Retric 9y agoNo not most people. But, if you own 60% of a company it can take a long time to unwind without impacting the price. Further the transion is smooth as selling 1 million in most stocks in a second would change the price. Anyway, my point is simply that trades are the mechanism that changes price. So, you can't expect to sell arbitrary amounts of stock at the current clearing price.
- dagw 9y agoHow many people own 60% of a publicly traded company?
- Retric 9y agoWorldwide probability less than 20. But again that's just the extreme that demonstrates what's gong on. If you ever watch a stock ticker and calculate the volume of sales needed to change the price it's less than most people assume. +/- a few cents might not seem like much but drops can spiral with relatively small initial sales.
- Retric 9y agoPS: While this topic seems to annoy people I suggest you look up 'off-board' trading before dismissing the idea. EX: https://www.wsj.com/articles/SB860538568435594500 https://www.wsj.com/articles/SB860538568435594500 The reality is the current ticker price is only meaningful up to mid sized transactions.