Liquidity Squeeze

  

Categories: Trading

You were worth a billion dollars in stock at the last round's valuation. Unfortunately, your company isn't public, so nobody actively wants to buy shares. You needed to come up with $8 million for that final divorce settlement payment, payable in cash. But you couldn't. You didn't have the cash liquidity to do so.

So now he gets all of your stock. Poor you. Literally.

That's what happens when you have a liquidity squeeze, i.e. you can't get cash to pay for things you have to pay for, no matter how much he bores you after you said, "I do."

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Finance: What is a Liquid Market?17 Views

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Finance allah shmoop What is liquid market Well it's one

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that trades Ah lot High volume Lots of buyers Lots

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of sellers Liquid lots of cash sloshing this way In

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that way Go this way and that Did you ever

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see a liquid market go this way and that That

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little song Did you ever see a lassie Never mind

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All right Weir Liquid markets Good Well because they implied

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there's Lots of cash ready willing and able to be

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put to work And that's usually a sign of a

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healthy risk seeking active market versus risk averse one which

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is you know hiding Ah liquid market means that investors

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want to put their cash toe work that they have

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actually saved cash along the way and or that they

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have relatively easy access to credit And you can think

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about it from the perspective of your kindly loving realtor

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who wants a world where lots of people are buying

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homes But in orderto have that happen you have to

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have lots of people who are also selling homes at

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the same time Otherwise prices just go higher and higher

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with no supply to meet demand And at the end

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of the day in real estate and it's in the

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stock market while the most important thing yes that the

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brokers get pays So that's a liquid market one that

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sloshing around not ice Where everything's you know all jammed 00:01:22.109 --> [endTime] up No needs heat or an animal or something

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