How is the quantity of a company’s stocks tracked?

840 views

There is a specific number of stocks for each publicly traded company, right? With all the avenues of trading, how are there never shortages of a stock?

In: Economics

5 Answers

Anonymous 0 Comments

Every publicly traded company has a “transfer agent” – a company that specializing in the record keeping for the company’s stock. Whenever shares are issued by the company (such as when a company executive exercises stock options awarded as part of the executive’s compensation), the transfer agent is who records the new shares and makes them available for trading.

The second part of the system that makes this all work is the Depository Trust & Clearing Corporation (DTCC). For most U.S. publicly traded companies, most of the company’s stock is held by DTCC (actually, its nominee Cede & Co. is the “registered owner” of the vast majority of a company’s shares). When shares are bought and sold by brokerages, they get moved around on the books of DTCC.

Anonymous 0 Comments

Yes, each company has a set number of shares. This can change (a company can choose to issue more shares or buy back and retire shares) but at any given moment in time, the number of shares is limited.

There is never a shortage because for every person who wants to buy a share of stock, there must be a person willing to sell their share of stock. That is what the stock price actually is – the price at which the number of people wanting to buy is equal to the number of people wanting to sell. If demand for the stock goes up (more people want to buy) then the price of the stock will rise (enticing more people to sell and fewer to buy) until equilibrium is reached.

Anonymous 0 Comments

There’s never any shortages because someone is always selling. If nobody was selling but people wanted to buy prices go up until people are enticed to sell. Demand for the stock sets its prices after IPO.

Anonymous 0 Comments

Apart from the other excellent comments, it is also required by law that a public company disclose their total outstanding and issued shares in their financial reports. These reports are usually available from the company (website) or through the SEC (online through EDGAR). This is applicable in the US but other countries have similar requirements.

Anonymous 0 Comments

The company is supposed to have a record of every shares on the market and who have them in their possession.