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

executive stock option compensation… if price goes up it will be worth millions if not zilch, this is how boards motivate those that run the company to run it in such a way that stock price increases which is good for the shareholders. Share price tanks, the shareholders will vote to replace board members.