Where will the 'unfavorable' shares end up?

Question

I have a question about shares (stock). Logically, when many people sell in the stock-exchange the shares which they hold (either physically or in future trading), then the stock-exchange will buy the shares and other people will buy the shares.

However, if the company's reputation falls, more and more people will sell its shares, and very few people will buy them. Where will the shares end up? Who will finally hold the unsellable shares? Who will suffer the loss as a consequence of having those 'bad' shares.

Thank you.

A nobody · Accepted Answer

1- The stock exchange DOES NOT buy stock from any one.
Stocks are bought by people, firms or organizations who believe in the stock but the exchange is never the buyer

If there are very little or no buyers, the price of the stock drops and many investors are left holding the bag so to speak or hold onto shares whose value has dropped considerablly.  
When there are eventually no buyers and no interest in the stock, the exchange will de-list the stock an let it trade Over The Counter.  This often times creates a "penny stock".  Some people still hold onto the stocks with hopes of it coming back, usually it never does and those investors end up with stock that has no value.

Anonymous · Answer

The Market maker is the person or persons that is responcable for buying the stocks at what ever price is posted, as the price drops the market maker keeps droping the price until someone buys. If no-one buys the stocks the market maker keeps them. This situation is very rare as the stock market usually always has buyers on one side and sellers on the other side. The market maker is the middle man keeping the market for that stock alive so to speak.  But there is always some-one left holding the bag.

? · Answer

In fact, the answer to the question is me.  I buy all unloved shares and stockpile them.  When I was a boy I watched "Rudolph" every Christmas and then when I grew up I decided that my brokerage account would be just like the Island of Misfit Toys.  Here all stocks are loved and appreciated waiting for the day when people will lay down their prejudices and accept that in one way or another we are all Misfits.

Every year at Christmas, I advertise heavily on various internet sites that "There are no Misfits at Christmas" and sometime I find homes for these unwanted stocks.   Someday I dream of a world in which there are no Misfits and every day is Christmas.  Because as every good stock trader knows, even Bumble's bounce.

The Mask · Answer

Thank you John. It reminds me of my past intention of sending a card to Santa in the North Pole some time before Christmas. :-)

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Where will the 'unfavorable' shares end up?

4 Answers