3 ms·
The price of a stock has only an indirect relationship to the abstract value of a company. The current price of a stock is simply the highest buy order that is
by dwohnitmok 7y ago
The price of a stock has only an indirect relationship to the abstract value of a company. The current price of a stock is simply the highest buy order that is not yet fulfilled by a sell order.
So if a company just keeps offering to buy stock at a high enough price to match existing sell orders it'll push the price of a stock up.
Whether that's sustainable in the long run is a different story, but there's no ironclad mathematical relationship.
- Thorrez 7y agoYes, but investors who see that the company's coffers keep shrinking might sell exactly enough to counteract the buys. My question is whether there's any logical reason for investors not to exactly counter the buys with matching sells.
- deleted 7y ago[deleted]