Quoted By:
When the stock market crashes, where does the money that was lost go to? Is it reallocated to somewhere else? Does it just vanish like a fart in the wind?
Semi noob here, trying to learn a few things.
I've started to learn about greenshoes recently, and I'm lost as to whether or not a typical investor is able to make a return on one, if they time their investment well.
I know that if an IPO falls/breaks its price, the underwriter will buy back the shares it oversold at the IPO price, driving prices back up (hopefully) to the initial offer price.
So if, when the price briefly falls, an investor goes in long right before the price is "fixed" back up to the initial price, does the investor make a return?
I assume so, but I'm just confused because if those share never actually existed, they were just oversold, how can a return be made?
