Companies make money by selling products and services. If they sell well, they get profit. Bang, end of story, right? Where does stock price come in and why does it matter?
I do understand that during IPO the company basically sells stock, instead of product and services, and gets profit from that. But later on, when stock is just traded between people outside of company, why does its price matter **to the company?**
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Stock prices are like loans rates for companies. Specifically stocks and bonds are just debt issued using different terms. On a very fundamental level the income a company makes is literally: the value it adds to the capital used to produce a good or service (i.e. profit), minus the cost of that capital (i.e. the interest rate it borrows at).
It is way harder to increase the value proposition of a complex product, than it is to say your company is great and you see a good future for the stock price.
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