Why do companies care about their share price after the IPO?

Question

As I understand it, once a company raises, say $5 billion in an IPO, the shares are sold and they get the money.

The shares are already with the public now. Why is it so important for public companies to grow their share price further every quarter? Why not focus only on the final profit margins?

In: Economics

Answer 1

A lot of CEO’s get paid with stock, which isn’t taxed until it’s cashed out. This leads to them making decisions that boost the short-term profit-reports, to the detriment of long-term profitability