Re: Supply/Demand

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Andrea Koch

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Re: Supply/Demand

in response to

Supply/Demand

Quan Gork

posted on Jul 17, 2014 03:34AM

Quan Gork: I am a little confused on some of the discussion about supply/demand of shares. This is not the same as when the supply of beer goes down (which would be tragic) so the price goes up. I think investors think in terms of money when they buy shares. So, if you want to invest $10,000, and the SP is $2, you buy 5,000 shares. If there is a 5:1 RS, and the SP is now $10, and you want to invest $10,000, you buy 1,000 shares.

I like your beer comparison, Quan Gork. Before and after an RS, we have the same amount of beer. However, before the RS it is all filled in bottles, after the RS in 5-liter barrels.

Plus the barrels may be bought by such investment companies who don't want to mess around with bottles.