Tuesday, September 27, 2011

How do stock options work if a company is not public?

I just got hired at a company that is private but would like to be bought out eventually, how would stock options work being that the company is a private company but could eventually be bought out by a company that is public?|||Companies issue stock and stock options even before they are public. This means that when the company is successful and has an IPO or gets bought out, the stocks and the options, which are nothing more than portions of the company given to you, will be worth more.





Ka ching.|||It doesn't matter whether the co is private or public. if you are given options you will have the option to buy the underlying shares some time in the future. When that time arrives you will have to decide whether the options are worth taking up. If the company is quoted by then it will be easy. If not you will have to find out if shares have changed hands privately and at what price or if the company will let you sell them or they may have buyers. One would hope that as options are used as an incentive they would turn out to be profitable.

What usually happens to a stock after a stock split?

i know that they split the shares, but what are the effects of that on the stock itself? I just looked at some charts of stocks and saw that some stocks were split at a point in time. Does that mean that a stock might go up or down? Or is there no correlation between that whatsoever?|||Stock split refers to a corporate action that increases the number of shares in a public company. The price of the shares are adjusted such that the before and after market capitalization of the company remains the same and dilution does not occur. Options and warrants are included.





Take, for example, a company with 100 shares of stock priced at $50 per share. The market capitalization is 100 脳 $50, or $5000. The company splits its stock 2-for-1. There are now 200 shares of stock and each shareholder holds twice as many shares. The price of each share is adjusted to $25. The market capitalization is 200 脳 $25 = $5000, the same as before the split.





Ratios of 2-for-1, 3-for-1, and 3-for-2 splits are the most common, but any ratio is possible. Splits of 4-for-3, 5-for-2, and 5-for-4 are used, though less frequently. Investors will sometimes receive cash payments in lieu of fractional shares.





It is often claimed that stock splits, in and of themselves, lead to higher stock prices; research, however, does not bear this out. What is true is that stock splits are usually initiated after a large run up in share price. Momentum investing would suggest that such a trend would continue regardless of the stock split. In any case, stock splits do increase the liquidity of a stock; there are more buyers and sellers for 10 shares at $10 than 1 share at $100.





Other effects could be psychological. If many investors believe that a stock split will result in an increased share price and purchase the stock the share price will tend to increase. Others contend that the management of a company, by initiating a stock split, is implicitly conveying its confidence in the future prospects of the company.|||Absolutely no guarantees, but a study done about a year back showed that split stocks averaged an 8% better gain than the overall market in the first year...and 12% better in the next three.


Most recent example doing way better than those numbers: RIMM.


...but it was a great company before the split, anyway.|||Usually seems to go up a bit, but that is DEFINITELY not guaranteed.

How does the stock market really work? I have a few questions?

I want to know how the stock market really works in terms of:





1. Investors Buying %26amp; Selling shares; how does the trading volume, here, of individual buys %26amp; sells affect a company's stock price?





2. How can you tell how many people/investors are buying or selling a company's stock in order to go long or short and put the odds in your favour - is there any specific technical analysis indicator that can tell you this, or what else can?





3. How does news affect stock prices?|||1. Individual investors are really only a small percentage of the volume traded daily. Big money like financial institutions, and mutual funds represent most of the volume and therefore are the ones who have a chance to really affect the stock price.





2. Because volume is an indicator of the amount of shares traded, there will be equal buying and selling. I know you want to find out if the sentiment is leaning towards selling off or loading up, and I do not know another indicator than the stock's price. If the volume is more than 150% of the average volume traded, then there is probably a reason someone is buying or selling, so watch the stock's price to indicate whether they're loading up or selling off.





3. News usually has a very large impact on the stock's prices. The type of news is directly related to the movement in price. So if its bad news, the stock will likely fall, if its good news the stock will likely rise. The problem with making a decision on news alone is that the stock does not always move the way you expected because of news. If a company says they have had a great quarter with high earnings, the stock may not even rise if they expected to have an even better quarter with higher earnings.|||1.Stock markets work on the principle of Demand and supply.


Stock price goes up if demand is higher than supply and vice-versa.


Trading volumes plays important role in identifying trend of particular stock.


2. Technical Analyst can give you long or short call on the basis of technicals of particular stocks,


There are many technical indicators, chart patterns available in technical analysis. Each technical analyst follows some combination of technical indicators, these combinations may vary from one tech. analyst to another tech.analyst.





Try google to find info on technical analysis. You can learn.





All the best,





trendpower|||1. Trading volume is like a truth detector....higher the volume....the more the price movement can be believed. Lower the volume...price moves are not to be trusted.





2. How to put odds in your favor...monitor price movements and develop a system for buying and selling based on the price movement of the stock. Example of a simple system. Buy S%26amp;P 500 position when it trades above 200 moving average....sell when it drops below.





3. News and stock prices...most news is already reflected in price of stocks by the time you read it. Price movements will show up before the news hits...elephants (big money) leaves footprints and you can hear them coming a mile away if you take the time to listen.





Good luck.|||if it is good stock nothing to be worried.





there are many tricks which share market people trap.





it is purely gambling.





1) when you buy the shares the value of the share decreases .





2)when you sell the shares sell at market price, if cote the price stock starts falling.

What are some examples of stock characters in theatre?

Hi, I'm wondering what type of stock character I am. What are different types of stock characters? I know about ingenue and soubrette, but are there any others? And any examples of them from popular musical theatre would be great. Thank you!|||You should really research commedia del'arte characters which kind of form a basis for most theatre. Even looking at a Shakespeare play - all the same types of characters are around today. For example you could say there's the lover, the fool, the menace, the naive, the hero, the elder, the loyal, the traitor... Most theatre/film have the same characters in one form or another. It's a good experiment to spot them. George Lucas studied all ancient myths, legends and stories when constructing his characters for the first Star Wars movies. You can see you have the naive (Skywalker), the elder (Kenobi), the meance (Vader), the fool (C3PO), the loyal (Chewbacca), the traitor (Han - but he changes his mind at the end, quite a common theme), the lover (both Leia and Luke), and on the list goes... It seems that such broad characteristics are part of Human existence and therefore part of our art also.

What happens if I own stock in a company that is purchased by another company?

What happens if I own stock in a company that is purchased by another company? Do they "cash out" my shares and give me the same amount of money's worth of the new stock? Or do I get the same number of shares in the new company as I had in the one that was purchased?|||When companies merge, or are bought outright, then any existing stock will be converted into stock for the new "parent" company. This is not done on a 1-to-1 ratio, as it would devalue the parent company's stock; instead, it's done based upon the relative stock prices as of a given date (usually the date of acquisition). So if you have 1,000 shares of Bear Sterns (worth $10,000 per JP Morgan Chase's offer), then you'd find yourself with 217 shares of JP Morgan Chase (as their stock was trading at $46.06 as of last quote).





To determine this, divide the acquired company's stock price (or trade price, if it's a straight stock acquisition like the Bear Sterns/JPMChase deal) by the acquiring company's price. So you'd divide $10 by $46.06. This will tell you just how many shares one share of your stock will be worth in the new stock. Then you take that number and multiply it by the number of shares you currently have of the acquired company.





So it'll look like this:





(10/46.06)*1000 = 217.1....which leaves you with 217 shares in our example.|||Depends on the terms of the agreement between the companies. If its a buyout including shares you would get an equivalent amount of $ amount shares in the new company. So for arguments sake let's say the JPM deal goes through and they purchase BSC for $10/share. If JPM stock were trading for $40 (let's keep it simple) you would receive one share of JPM stock for every 4 shares of BSC you owned. So if you had 100 shares of BSC you would receive 40 shares of JPM in return. If it was a cash transaction, and you owned 100 shares of BSC, JPM would just send you a check for $1000.





Hope that helps.|||LOl, This was exactly what was going on my mind today. Let's say you own stocks at $10 in bear stearns, and JP morgan buys the company. What is gonna happen?


I will be checking for the answersof your question. GOOD QUESTION. I did not get to post the question myself today.

What happens if you own stock in a company and it get bought by another company?

I am curious what happens if you buy stock in a company, and another company buys it out. Do I lose the stock I currently have? Will I have the oppourtunity to sell it?|||You usually get a letter from company X (the company shares you own) stating that they are being taken over by someone else, company Y. The letter will also tell you what exactly will happen happen with your shares of company X.





Typically, you will get new shares of company Y( in this case the company that bought X).





Everything will be clearly stated in the letter.





If you are really anxious, call company Y and ask them how many shares you will get.|||You still own stock in the subsiduary company, and often it becomes more valuable.|||That happened to me. I held on to it and the stock split. Initially the price of each share dropped, then it gradually climbed back up. I quadrupled my money in 5 years. I am one happy camper but it depends on the companies involved, the industry outlook etc.


Just saying that it can be swe-e-e-e-et!! : )|||I believe you will loss all your shares. I suggest selling before you they steal it from you|||you keep it. however if the goodwill value of the old company was over priced, the value of stocks will go down. if own stocks you shud follow closely on the buyout |||"Go directly to Jail" - Monopoly

How are stock anyalysts selected and how influential are they to the price of a share in a company?

Also who pays the stock analysts?





Indirectly and directly?





Does this not create suspicions that these "analysts" are bribed?





And dont say the SEC , we all know who first started overlooking that operation (Joe Kennedy one of the biggest weasels on Wall Street ever!)|||Like any job, stock analysts apply for the job generally with brokerage outfits, but also commercial and investment banks and independent research shops. The analysts are paid by the firms they work for. Are they influential. Yes, to a certain degree. But if a person has a poor track record, he/she is generally dimissed in the market place.