So, what you’re writing is in good faith, I can tell, but shows a fundamental lack of understanding how shares work.
If the value of a company goes up, the number of shares doesn’t change, the price per share increases. So, if a company emitted 100 shares, and they were valued at $10 each, for the worth of the company being $1,000.
Now, stuff happens, and the company is now worth $10,000. It doesn’t mean that there are now 1000 shares, it means that each share is now worth $100.
Which means that there are no “excess shares”.
What a company could do is something called “stock dilution”. For example, you have that company from before, worth $10,000, with 100 shares, $100 per share, right? They dilute the shares and emit another 100 shares, bringing the total to 200. But the value of the company is still $10,000, it just means that the value per share is now $50.
Seems like a good idea? Here’s the problem - control over a company is still determined by the percentage of owned shares. You had 100 shares? You need 51 to independently control the company. You now have 200? You now need 101 shares for the exact same level of control.
Which means: either the CEO of that company loses control of the company (effectively “gives it away”, potentially to malicious actors from the competition who just want to shut him down), or he still needs to own 50%+1 shares (so from 51 to 101 shares), meaning his wealth doesn’t change at all.
So, what you’re writing is in good faith, I can tell, but shows a fundamental lack of understanding how shares work.
If the value of a company goes up, the number of shares doesn’t change, the price per share increases. So, if a company emitted 100 shares, and they were valued at $10 each, for the worth of the company being $1,000.
Now, stuff happens, and the company is now worth $10,000. It doesn’t mean that there are now 1000 shares, it means that each share is now worth $100.
Which means that there are no “excess shares”.
What a company could do is something called “stock dilution”. For example, you have that company from before, worth $10,000, with 100 shares, $100 per share, right? They dilute the shares and emit another 100 shares, bringing the total to 200. But the value of the company is still $10,000, it just means that the value per share is now $50.
Seems like a good idea? Here’s the problem - control over a company is still determined by the percentage of owned shares. You had 100 shares? You need 51 to independently control the company. You now have 200? You now need 101 shares for the exact same level of control.
Which means: either the CEO of that company loses control of the company (effectively “gives it away”, potentially to malicious actors from the competition who just want to shut him down), or he still needs to own 50%+1 shares (so from 51 to 101 shares), meaning his wealth doesn’t change at all.