I dont understand what makes Stock not liquid? Unless you want to sell it all, you can borrow against your stock for cash.
If you want "Cash" only. I believe that point of owning cash is privacy and not having to disclose them.
If you want "Cash" only. I believe that point of owning cash is privacy and not having to disclose them.
If you're Jeff Bezos there's no bank that is going to lend you 100B$ against your stock, because:
1. they don't have this money available themselves
2. there's less than 100B$ liquidity to dump these stocks on the market if they go down in value and Jeff's assets have to be liquidated, so the bank will limit the amount of money it will lend
If I own 0.01 percent of any heavily-traded stock, it's 100% liquid. I can sell it whenever I want at a moment's notice. In any such accounting it will be added to my liquid wealth. But if I own 25% of the same stock, it's illiquid.
If I also run the company, then it's worse because any attempt to sell a large part of my holding will itself trigger a crash in the price.
Hey poors, take example from Jeff! He's not liquid at all, like all of you, but he's always so happy!
By now it only feels to me as a cheap way to hijack the discussion and derail it further from the fact that we have to debate why billionaires exist and not how liquid they are.
In the end the anti-billionaire/anti-system sentiment exists for valid reasons and it doesn't need to be educated to show us that there is an ever growing discontent with the way things work.
Making a list of richest people based on stocks is disingenuous because they will never be able to get that valuation if they sold it on the market due to the selling pressure such an event would exhibit from selling that much stock. Also gains in stocks are called unrealized wealth. It's not considered wealth until you decide to sell.
Recently Elon sold stock to shore up funds to buy Twitter. Doing so he tanked the price of TSLA.
Bezos doesn't need to sell 100% of his AMZN to retire. Just a few points would be enough to live a lavish lifestyle.
This is a real issue though, and the same problem you're describing exists in the inverse. How was Elon able to buy 100% of the shares of Twitter without prices going to infinity? You go to private buyers and sell large blocks at a discount (or buy large blocks at a premium) to the current market value. Drag-along clauses help ensure there aren't meaningful stragglers once start approaching 100%.
Mackenzie Scott got $36B of Amazon stock and has sold $8B.
Large shareholders aren't very large. They dilute their shares over time. The Google guys have a tiny amount of financial shares of Google, while retaining voting shares.
I just don’t understand how once you reach a certain level of wealth you are functionally locked out of ever accessing it except on paper. Someone must have kept their wealth or cashed out (one way or the other) at some point. It feels like, if true, no business would ever exist more than 30 years but clearly there are many businesses that have.
Typically at those levels of wealth there is a “family office” which is just a word for “hedge fund” that’s only clients are the family. Like any hedge fund they can use those shares as parts of lots deals to diversify, manage risk and pull out cash.
Sometimes it’s even simpler, dividends can provide a significant cash flow for large shareholders.
In any case, it would be extremely strange for someone to get very wealthy and then hold most of their portfolio in cash.
Liquidity implies that you can buy anything with stocks.
People sell stocks for money because money can buy more things than just money.
To quote Cornell (https://www.law.cornell.edu/wex/liquid_asset):
>Liquid assets refer to cash on hand, cash on bank deposit, and assets that can be quickly and easily converted to cash. The common liquid assets are stock, bonds, certificates of deposit, or shares.
>Liquid assets are different from non-liquid assets, such as property, vehicles, or jewelry, which can take longer to sell and may lose value in the sale. Liquid assets are perceived as being the most basic type of asset available.