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When the stock market crashes, if everyone wants to sell, who will buy? Is it possible that no one could sell his shares because no one wants to buy them? If so, what would happen? Would share price decrease? Would it drop to zero?

I was told that the company will buy if everyone wants to sell. I don't think that is true.

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  • $\begingroup$ There's always someone who wants to buy if the price is low enough. If you sell me Apple for $0.10 I'll take it. $\endgroup$ – user253751 Aug 27 '20 at 10:07
  • $\begingroup$ Not answering the main question, but just to note, "the company will buy if everyone wants to sell" is false. In some cases a company might choose to repurchase its stock if it falls too low, but it's definitely not certain, mandatory or even all that common. $\endgroup$ – Peteris Aug 27 '20 at 12:23
  • $\begingroup$ I guess prices could drop to zero. They could even get negative if people would actually be willing to spend money for getting rid of them. Negative prices occurred in oil earlier this year as nobody wanted to store the oil because storage is costly. Storing shares is not that expensive, but yeah, if everyone wants to get rid of their shares, why not pay someone for taking it off your hands? I'm sure companies would be happy to repurchase at negative prices, but I have a vague recollection that there are some regulatory constraints buybacks. $\endgroup$ – Wecon Sep 2 '20 at 10:27
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Yes, price will decrease. If nobody wants to buy at lower prices, sell orders will push stock prices toward zero.

This is possible in periods of financial turbulence, especially for companies that are very exposed to uncertainty and have do not have positive financial results to show to investors.

If you are interested in exploring this topic, I suggest that you start by reading about the stock market crash of October 1987.

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  • $\begingroup$ Indeed, although prices will never actually hit zero - there's no reason for someone to sell a share of stock for no benefit whatsoever (outside of capital loss scenarios). Even a remote possibility that the stock will someday be worth something gives it non-zero value. $\endgroup$ – Nuclear Hoagie Aug 26 '20 at 15:27

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