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

Part of the reason companies can seem so ruthless is that raising the stock price is really the only goal. So fucking over the workers, putting out an inferior product to cut manufacturing costs, etc., is just part of the process of “success.” That’s why your executive pay packages often contain significant options clauses. It ensures that executives focus on stock price to the exclusion of virtually everything else.