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
Stocks generally also represent votes in the board meetings. People with a lot of stock in the company show up to those meetings and make decisions that they think will increase the value of their investment.
Employees and executives are also sometimes compensated with some company stock to give them a financial incentive to perform well.
And finally, if your share prices drop *too* low you’re at risk of a hostile takeover attempt – where another company or capital firm tries to buy 51% of your penny stock shares or form an alliance with some board members so that they now control the board of directors. Then they may vote to lay everyone off and strip the company for assets.
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