From my little understanding, company’s issues stocks to raise money. So once the company’s sell those stocks, why does it stock prices matter to them?
In: Economics
The total number of shares and the price of the stock is supposed to be the total value of the company. When you see a pattern of the value of the company increasing, it’s assumed the company is doing well/growing.
The company’s board of directors are also generally “voting members” and primarily base their decisions on the stock price, which leads to a widespread phenomena of “appeasing the stockholders” where most of the decisions of employees (generally middle management and up) are done to make the stock price increase, making the stockholders happy and less likely to make disruptive changes
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