eli5 why do companies with billions in the bank care about stock prices. Wouldn’t they be financially fine if the stock lost money?
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A company is run by a CEO and their employees. However, the boss of the CEO is the board. The board represents the shareholders (*aka* owners of the company) and have the ability to fire the CEO and hire a replacement.
A company may be financially fine if they have a substantial cash balance, but companies are valued on market cap. Market cap is determined by share price and shareholders, management, and employees with stock incentives are all incentivized to want a higher share price.
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