some basic questions on trading

#1
Hello guys i am new here i would like to know (1)how does a company decide IPO? (2)if the stock value increases then what will there be profit for the company?because since it has already sold the stocks to investors (3)suppose if price of a stock decreases to zero then will the investor of the stock have any ownership towards the company & suppose if stock value increases then can the investor sell the stock?.please help me with these questions.Thank you very much.
 

rkkarnani

Well-Known Member
#3
Hello guys i am new here i would like to know (1)how does a company decide IPO? (2)if the stock value increases then what will there be profit for the company?because since it has already sold the stocks to investors (3)suppose if price of a stock decreases to zero then will the investor of the stock have any ownership towards the company & suppose if stock value increases then can the investor sell the stock?.please help me with these questions.Thank you very much.
The questions you have asked are too too too too too basic, best is get some education about the subject Googling your doubts.
Let me try to explain to my ability ...

The price of the shares of a company reflects the "working, profitablity, future prospects or lack of them!! The increase or decrease in the price of the shares of a company does not affect the profitablity of the "company". It may affect the "promoters" of the company who hold shares in the company and also affects the general share holds. The company does not gain by any increase in the Value of Shares in market.
There are set procedures for IPO. You may refer to SEBI website. Comanies requiring more capital to expand or initiate there business go for an IPO. The price of a stock cannot decline to zero, on NSE it may decline to 0.05 Paise! :D and in some cases in BSE it may to 0.01 Paisa. Ownership remains , value erodes!! :D
 
#5
thanks i am a newbie in investing but before investing i wanted to clear all my doubts after you have answered the question a new question has come up in my mind. Suppose a person bought at stock from company & he forgets :) about it since he was busy.after 80 years if he remebers about the stock can he claim it if the company exists or is there any finite time in which a person can hold the stocks of a company?
 

rkkarnani

Well-Known Member
#6
thanks i am a newbie in investing but before investing i wanted to clear all my doubts after you have answered the question a new question has come up in my mind. Suppose a person bought at stock from company & he forgets :) about it since he was busy.after 80 years if he remebers about the stock can he claim it if the company exists or is there any finite time in which a person can hold the stocks of a company?
You are a "partner" in the company to the extent of your share holding!! Does it answer your question or do I elaborate.

Okay, let me do it... You can hold the shares for 80 years, you can do it for 800.. rather eternity or till the time the Company exists, whichever comes earlier!! :D Usually the company will not allow you to forget that you are a share holder...u ae entitled to recive Balance sheets, notices and ofcourse not to forget Dividends if any!! Maybe a few Bonuses!!! They say that a person who invested Rs.10000.00 in Wipro on Listing would be mutimillionare today, if he had forgotten that he had shares!!
 

rkkarnani

Well-Known Member
#7
thanks i am a newbie in investing but before investing i wanted to clear all my doubts after you have answered the question a new question has come up in my mind. Suppose a person bought at stock from company & he forgets :) about it since he was busy.after 80 years if he remebers about the stock can he claim it if the company exists or is there any finite time in which a person can hold the stocks of a company?
Well forgot to add : Now a days if you Buy a company shares, it normally comes in Demat form (Please dont ask what demat is, just Google it) so the DP where you have your accout will not let you forget that you are holding shares as you would be paying to the DP their annual maintainence charges!!:D