There is a second reason as well. If they are sitting on cash and think the stock is under-valued, they will invest in their own company. This does two things. First it props up the price by increasing the buy side demand. Second, it provides them the opportunity to enjoy a gain in the exchange when they put those share back into the market at a higher price.
It also helps increase the Earning Per Share EPS, when earnings come out they put them into a per share basis. When companies buy shares they are no longer considered outstanding, so the same amount of money is divided among less shares. Want to chat about trading the Dow.
No. The US Government does not generally own stocks of publically traded companies. BP stock trades in the US, so Americans can own BP stock. The manner in which foreign companies allow their stock to be traded on the US stock market is a bit complicated, so I have attached related link (if you are interested).
Safety. If you short a stock, you borrow it, sell it, wait till the price drops and buy it back. Problem is, if you're wrong you lose money buying the stock back. And if the stock takes off like a rocket, you lose a ton of money. If you buy a put (for this you normally get a naked put - one where you don't own the underlying stock), being wrong only costs you the premium.
A private company is owned (in most cases) by the companies founders. You cannot buy stock and own a portion of a private company. A public company has sold part of it's stock to shareholders and they own part of the companies assets through an IPO (Initial Public Offering). It can be traded on the U.S. Stock Exchange. An example of this would be Facebook. Facebook just IPO'd and went public. Anyone can now purchase stock and actually own part of the company. An example of a private company would be Ernst & Young. You can't purchase any of the companies stock because they are private.
It is possible to do that, but whether an individual can do that depends on their access and how they are trying to buy and sell. For instance, even though you own the stock in your 401K, you would likely not be able to make such a trade, because requesting the trade through your 401K would take too long.
Because when people buy stock, that means they are paying a company a sum to have the right to own a part of that company. When this happens the value of the company goes up. However if people do not like a company they will sell the stock they own and get money back for it. When this happens the company now holds less money and its stock goes down. This happens with thousands of listings everyday on the stock exchanges.
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