Expert: Jay Kay - 11/22/2006

Question
I wonder how can a listed company benefits from its share trading between shareholders. I mean if I am a shareholder and I sell all my shares to an interested buyer, I am the one who will receive the money from the sales, not the company. And the buyer will be the new shareholder, who owns my sold shares, not the company. So where did the company really benefit when shares are traded and bought in the market including increases in share prices due to speculation? I have no idea how the company will get the financial benefit when its shares are traded everyday between people who totally has nothing to do with the company's management.

By the way, do you know of any internet sources that provide studies on the effect of the 98' world economic crisis on Asian companies?

Answer
The kind of trade you describe occurs in what is called the "secondary market."  The company does not directly benefit from such a trade; in fact, it is not directly involved in such a trade.  The benefits accrue to the buyer's brokerage firm and the seller's brokerage firm, both of which normally charge a commission for the transaction.  The transfer agents involved in the listing and delisting of share ownership (i.e., banks)charge their clients for the services they provide.

I have no information about your second topic.