I know stocks are traded to raise funds and help operate the business better, but can companies use the money to directly pay their employees? Or does all payroll come from revenue?
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When people buy or sell stocks, the company sees none of that money. Its only when a company issues MORE stock, or buys the stock back does the company get/pay money.
Usually a company covers its payroll through revenue. Having said that, sometimes additional money comes through an additional investment: venture capital, additional rounds of funding etc. But again, those injections of cash are really changes in equity; we’re adding more owners, or increasing ownership stakes. If your company can’t fund its payroll through revenue at some point, eventually – once it can’t find additional investors willing to sink monkey into it – it will run out of money.
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