You might want to look at private trading markets. It is sort of a lower scale version of the public markets. Companies can be traded between entities as stock without the onerous accounting requirements but there are certain stringent requirements. There can be at most 400 share-holders and the deal killer -- stock holders have to be institutional investors with over $100 million in assets. If you have that much cash, you may as well become a VC.
I am not an expert on this so independent checking on this would be nice. To my knowledge, NYSE and GS have setup something like this.
It would not go through: you can only buy as many shares at once as other people are currently offering at that specified price, which would be negligible compared to the total amount of shares.
it's interesting to think about why not. it probably comes down to noise and friction in transactions, so that 1e-9 of your company is not a meaningful/tangible quantity. you could imagine an economy in which you could indeed issue a billion shares at a dollar each and have them be worth buying individually.
It would require a number of transactions as there is no single other shareholder that owns 51% in this case. So you can do a large number of transactions in a short window, which would cause the price to skyrocket. Additionally, there are disclosure requirements in place once a single shareholder reaches 5%+ ownership. Once the word gets out, everyone else starts buying.
But then you can arbitrage it. Buy 10,000 times 1 share, sell 10,000 shares. You can't really do that in the bond market, but you can in the equity market.
Freetrade in the UK is planning offering this in the next few months I think.
Fractional shares through DRIP is something else really as you can’t purchase them directly.
I’d be interested to know how it works too, but it could be as simple as the brokerage buys 1 share when you ask for 0.5 then keeps the other half on the books, sells the other half to someone else.
If you own all of the voting shares sure. But a company can have 100,000,000 shares, own 99,000,000 of them, so only 1,000,000 are trading. If you buy all 1,000,000 of those shares you don't have much power.
So.... if you can monitor the sales of all SEC employees; then you could copy-sell, or buy up their shares en-mass and very rapidly sell them for a profit?
You could theoretically, with shareholder approval, take a company private, split the share classes, and then IPO again and resell the shares to the same people.
In the interim while private, some bank would be the 100% owner, with some contract saying they must re-IPO within 24 hours and resell shares for 1 cent to the original list of shareholders.
And I don't see any reason you couldn't do all this on one day - you just need approval of 51% of the shareholders and the board.
Why do you think 51% of the companies shares are available all at once at exactly slightly above market value? How exactly do you think this trade would get completed?
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