Burying Your Company's Stock

You must bury the shares of your public company to reduce its float. Your investor relations costs will be lower if your public company has a lower float. [See my article on the proper use of shares.] The buried shares will be deducted from the float, and the remaining amount is fxcm.my/cara-beli-saham-cfd/ the effective float. You want to get the effective float as close to zero as possible. If your effective float is zero, you need not find buyers for your float because there are no shareholders selling their stock in your company. It is obvious that this is the best situation. I suggest that if you want your public company to succeed in all aspects, you may want to structure your company's float like this.

Speculators, Not Investors

American stock buyers, on the whole, are speculators, not investors [1]. Stocks are bought with the intention of selling them quickly at a profit. Even the U.S. government realizes that speculating does not lead to economic growth. Taxes for stock buyers willing to hold their shares for at least one year are less than for those who speculate in the Market and quickly sell their stock. Tax incentives from the American government have not changed the speculative nature in the U.S. Market because long-term investors continue to lose money. I've always wondered why long-term investors buy and hold stocks in this manner.

Avoiding Having Your Shares In the Market

I have been involved in the North American stock market for over 20 years and can confirm that professionals make more money by selling shares short (betting on the fall of the share price or the bankruptcy of the company) than by purchasing shares. There are over twenty ways to short sell stocks that are not listed in textbooks. (I have written a short selling article that lists twenty-four ways to short shares.) The only effective defense to short selling is to ensure that the Depository Trust Company (DTC) in New York doesn't have any of your company's shares in their possession.

When most people buy shares, they leave them "in street name" rather than taking possession of the share certificates. "In street name" simply means they are all turned over to the DTC for safekeeping. Short sellers "borrow" or otherwise rely on the existence of street stock to sell nonexistent shares into the company's market. Public short sellers anticipate paying back the "borrowed shares" at a much lower price when the stock crashes. Professional short sellers do not expect to be able to legally buy back the shares that aren't there and avoid paying U.S. tax on their profits. Your company cannot be sold short if the shares can't legally be borrowed.

If your company can keep your shares away from the DTC, by having all your shareholders demand physical delivery of their share certificates, your company is said to have a Cash Market in its stock. Few companies bother or understand the dangers they run from short sellers. Brokerage firms and DTC try to make it as difficult as possible to create Cash Markets in any stock.