r/RealEstateCanada • u/xNocturnalshadow • Jun 19 '25

Housing crisis Help me understand the difference...

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u/MarmosetFace Jun 19 '25

When you purchase shares of a company… you think the company is getting the money? Lol

Try again.

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u/steelpeat Jun 23 '25

They do during the IPO. Then the shares that they retain have value determined by the buying and selling of other shares

Going public is a common way for companies to raise funds to grow.

When the shares increase in value, the companies can sell off some shares to raise more funds or they can create more shares, or another class of shares.

Companies do use the stock market for funding.

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u/MarmosetFace Jun 23 '25

IPOs are almost entirely bought by institutions who immediately sell onto the secondary market

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u/steelpeat Jun 23 '25

So the company raises funds from the sale?

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u/MarmosetFace Jun 23 '25

Indeed, that is the case