4 ms·
> I mean it seems that it yields the amount of Dollars that all stock buyers have been willing to either pay or hold at. That's not how trading markets and sto
by dnautics 5y ago
> I mean it seems that it yields the amount of Dollars that all stock buyers have been willing to either pay or hold at.
That's not how trading markets and stock prices work. The stock price is the price that the last trade occurred at (and that is usually -- but not always, especially not if the market is illiquid) between the highest buy price on currently in the market and the lowest sell price in the market.
It is explicitly not the price all stock buyers have been willing to pay --only the last one.
- leobg 5y agoYes, this is true. But isn’t it also true that everyone holding a stock is making the implicit choice not to sell at the current price? To phrase it differently: If they thought their position was worth less than what they could get if they sold at the last recorded price, then they would dumb their shares. Hence the fact that they keep holding suggest that they think the current price does not yet reflect the value of the company.