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The price drops to zero if the business dies because the stock gives you no voting power or dividends. Because the company is dead. So, if it's a dying busines
by pimmen 7y ago
The price drops to zero if the business dies because the stock gives you no voting power or dividends. Because the company is dead.
So, if it's a dying business everyone is pouring their money into then every active manager would search the couch for every last penny to short it with. Which is why I don't believe index funds will make up 100% of all stock assets because people who do understand the market would exploit the index fund allocation and attract more capital, and the stock picks of those successful active managers would quickly be represented in the index.