Question:
this is weird to me.
i see that market capitalization mean how many shares a company have times the share price...
so i see that exxon mobile's market cap is close to 500 billion dollar. by the way exxon mobile has the larget market cap, i belive. so anyway, my question is that how can a market cap be worth more than a company...
i mean if everyone was to cash in the their stock right now, where would the company get all these money from???
Answers:
If everybody wanted to cash in their stock right now.they would go to the exchange and sell. The company is not involved. If "everybody" is selling, and nobody is buying, the price will go down and down and down until "buyers" are found, if any. That's what happened in 1929, everybody sold at the same time, and there were no buyers.
A company does not ever have to buy back it's own shares unless it chooses to.
I have always wondered that!
You can't make the company buy the stock back. It's traded in the secondary market. They can buy it there too, but they can't be forced to purchase any of it.
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