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
A stock is part ownership of the company.
So stocks aren’t just something they sell off and walk away from the people who own stocks are the people who own the company. Everything the company does is ultimately for their benefit.
Some stock is sold off to investors to get the money to get the company going. Some is held by founders or early employees. I won’t get into “stock options” but the basic idea is that instead of getting paid in salary, some people who work at the company get stock or the opportunity to buy stock. The company likes this because in the early days, they don’t have too much cash and they want to use the cash they have to get started. Employees and founders like this because if the company becomes very valuable then they can make a lot more money from the stock than they ever would have gotten paid and it’s taxed at a lower rate than a straight paycheck for similar amounts would.
So all those people, the early investors, the founders, the early employees- they together own the stock or have sold some off to other investors. And all those people who own the stock own the company. More or less if most of those people want the company to do something- it’s their call, because it’s their company. And what they mostly want the company to do is make their stock worth more.
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