When I buy a stock, who am I buying it from?
Another investor who wants to sell, or a market-making firm that holds inventory to keep trading smooth. Not the company, except during an IPO or new share offering.
Almost always another investor. Somewhere out there, a person or a fund decided to sell some shares at around the current price, and the exchange matched their order with yours. Neither of you knows who the other is, and it does not matter.
Often the counterparty is a market maker, a firm whose job is to always be willing to buy and sell. They hold a small inventory of each stock and quote both a buy price and a slightly higher sell price, pocketing the difference. That is what lets you trade instantly at 2:17 pm on a Tuesday without waiting for someone to show up wanting the exact opposite of what you want.
The company itself is on the other side only in specific cases: the initial public offering, when it first sells shares to raise money, and occasionally a later offering when it sells more. Companies also buy their own shares back sometimes, in which case they are the buyer, not the seller.
This is why a stock falling does not "hurt" the company directly. It hurts the shareholders, including its executives, and it makes raising new money harder, but the cash from ordinary trading never touched the company.
Informational only, not financial advice. Updated September 4, 2026.
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