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
There are different strategies on how to deliver value to shareholders.
What you’re describing is the traditional method. Shareholders buy and hold stock for the dividend payout.
You can also reinvest the majority of your profit and focus on growth. This increases the value of the stock by increasing the value of the company, ( revenue, assets, market share).
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