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
There are a lot of reasons.
Maybe the most important reason is that the people and institutions that bought the stock, who funded the raising of money that you referred to, are VERY interested in the stock price going up. That, after all, is the reason they bought the stock in the first place. If the stock price doesn’t go up in a steady regular pattern, they’ll get very disillusioned. This is important to the company management team because the major stock buyers make up the board of directors of the company. If they get too disillusioned they will fire the management team of the company and hire other people instead. Management wants to keep their jobs, so they care about what the shareholders want.
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