When some shares are bought, where does the money go? Does it go into the company’s bank account to do what it wants with it?

Similarly, when Musk sellls $4bn of shares, where does the money come from?

And then there’s dividends.

I can’t get my head around it.

Well the money goes to the previous owner of the shares. If its a new release the money will go to the company.

Wot he said.

Similarly, when Musk sellls $4bn of shares, where does the money come from?

Whoever he sells them to. Just like with anything else.

And then there’s dividends.

Company gives cash back to whoever owns the share at a certain point in time. This was basically the whole point in buying a share originally

Dividends: The company has made profits, paid corporation tax on them and still has money left over. It can either reinvest that or return it to shareholders as dividends.

The value of shares is theoretically the present value of all future dividends. So if a company is going to pay you a dividend of £5 per share every year for the next 50 years what is that worth to you?

@jimmy  Start from the basics. Suppose you had a great idea for a business, and you needed £1000 to buy the materials or stock to start off with. You ask your mates to chip in, and for each £10 they put in, they get a 1/100th share in the business. One might put in £50 and have 5 shares, another £150 so has 15 shares, and you might have put in £200 so have 20 shares. So if you make £100 profit, each share gets £1. The profit is divided so it’s called a dividend. Then the guy who paid £50 for his 5 shares decides he needs the money and he sells them, to someone else who thinks your business is worth investing in. If the business is making lots of profit, he can sell them for more than he paid. If it’s not, he might get less. If your business goes bust, the shareholders have lost their money.

Whoever he sells them to.

Assuming in this case, though, Tesla the company is the buyer.

I get the simple high level of it. I guess its the mechanics of it – I give money to, say, Hargreaves Lansdown. Do they send the money to that company (no doubt its more convoluted than that).

EDIT: Doesn’t really matter. I have too much to time to think clearly.

In the simplest terms HL are a go-between so they’ll buy from people wanting to sell and sell to people wanting to buy. They’ll try to buy stock for a cheaper price than they sell it, so they make some cash on the deal and they’ll also charge a small fee for their service.

My grandfather said that the best way to get rich was to handle other people’s money and have a tiny bit stick each time. Maybe I should have listened to him!

The value of shares is theoretically the present value of all future dividends. So if a company is going to pay you a dividend of £5 per share every year for the next 50 years what is that worth to you.
Thanks for that, I have bought a few shares privately in an unlisted company and that is the way I valued them, however a chap who tried to sell some of his to me had a weird way of calculating the value and we had words and fell out, his value was vastly inflated by my reckoning , he wanted to divide the value of the company in the published accounts by the number of available shares, other sellers were quite happy with what I thought …….potential dividend payable over a reasonable timescale, it was still well over their original purchase price, so they increased their capital and had historical dividends happy seller plus happy buyer is a good deal in my book. Have I got this right ?

Don’t forget stamp duty to pay !!

A company buying its own shares as far as the company is concerned the same as a dividend, it is a way of getting money back to shareholders. Companies use it because it is often more tax efficient for the shareholder.

When some shares are bought, where does the money go? Does it go into the company’s bank account to do what it wants with it?

Only if they’re new shares issued by the company. If you buy them on the stock market they’re second hand and the money goes to the holder of the shares not the company. It’s the same as buying a new car or a used one.

Once you own a share you’re entitled to a dividend payment as long as the company decides to pay one. Many don’t, such as Apple until recently.

Of course it’s a little more complicated in reality, as most share deals are via a dealing platform or broker. In this case you have a contract with the broker who promises to give you the same benefits of having a share without actually owning it outright.

In the simplest terms HL are a go-between so they’ll buy from people wanting to sell and sell to people wanting to buy. They’ll try to buy stock for a cheaper price than they sell it, so they make some cash on the deal…

This isn’t correct, unless HL are acting as their own market maker.

The value of shares is theoretically the present value of all future dividends

This isn’t how it works on a stock exchange. Dividends fluctuate, some companies don’t pay them and just reinvest with an aim to build more value in the company.

A company buying its own shares as far as the company is concerned the same as a dividend, it is a way of getting money back to shareholders.

While I’m here being pedantic, what you describe is a share buyback corporate action. A company could also buy it’s own shares on the market

a chap who tried to sell some of his to me had a weird way of calculating the value and we had words and fell out, his value was vastly inflated by my reckoning , he wanted to divide the value of the company in the published accounts by the number of available shares, 

That can happen, but tends to be for asset stripping companies who are in trouble, ie. They are worth more by closing it and selling all the assets than trying to keep it running and make money by actually trading

A friend of mine is winding up a company, the ordinary shareholder is at the back of the queue when obligations are being paid. If there’s nothing left the shares are not worth anything.