The spot price of crude oil dropped below zero. Some say that was due to market manipulation. And there is indeed evidence of market manipulation that day. But I'm not convinced that the manipulation directly caused the price to go below zero.
The official explanation was that demand for oil had dropped so low that there was a massive excess in supply, without adequate storage space. So crude oil had to be stored on oil tankers, at a cost much higher than the normal costs of storing oil in... um... "regular" oil storage facilities, I guess.
In other words, people who had oil and nowhere to store it literally had to pay someone to take it off their hands, because the buyer would incur unusual storage costs.
If you actually wanted to take physical delivery of crude oil, you could get it for free, and someone would pay you to take it. The price was less than zero, at least for a few hours.
So why couldn't a stock go below zero?
It is extremely difficult, but not quite impossible, to imagine a scenario in which shares of a particular stock were not just worthless, but where the holder would literally have to pay someone to take the shares.
It could only happen if owning the shares somehow had a liability associated with it. If owning the shares could actually, or potentially, result in the shareholder having pay some significant expenses or debt of some sort, then some people might actually be willing to pay someone to take the shares...
Publicly traded companies in the USA are corporations or limited partnerships, and that means that by definition, shareholders (or holders of limited partnership interests) are not personally responsible for the debts or liabilities of the company.
So it would require some very unusual circumstances, or a major shift in the legal landscape. It is probably impossible, under the current laws of the US, for the price of a stock to go below zero. But if certain things changed, it could conceivably happen.
BMK
