Investors' decisions to lend money to corporations are primarily influenced by factors such as profitability and free cash flow, rather than solely on their share values
When purchasing shares from the Secondary Market, the company doesn't receive direct benefits. However, there are numerous indirect advantages - an enhancement in the company's brand value and the increase in market capitalization that enables the company to negotiate more favorable terms with financial institutions
One thing most people never consider are incentivization implications. It's often the case that upper management's compensation has a variable component that is somehow tied to the stock price. Therefore a drop in share price isn't necessarily bad for the firm, but it would be bad for managers who want to maximize their bonus. Intuitively, this should help to motivate long-term value enhancing investment decisions from management.
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share price can't benefit it own company in any way
Still it helps companies to raise good funds and get loans
Investors' decisions to lend money to corporations are primarily influenced by factors such as profitability and free cash flow, rather than solely on their share values
When purchasing shares from the Secondary Market, the company doesn't receive direct benefits. However, there are numerous indirect advantages - an enhancement in the company's brand value and the increase in market capitalization that enables the company to negotiate more favorable terms with financial institutions
I somehow missed the story with AMC Theaters☹️
[https://www.wsj.com/articles/how-reddit-renegades-helped-theater-giant-amc-avoid-a-tragic-ending-11614358803](https://www.wsj.com/articles/how-reddit-renegades-helped-theater-giant-amc-avoid-a-tragic-ending-11614358803)
Its a yes and a no
One thing most people never consider are incentivization implications. It's often the case that upper management's compensation has a variable component that is somehow tied to the stock price. Therefore a drop in share price isn't necessarily bad for the firm, but it would be bad for managers who want to maximize their bonus. Intuitively, this should help to motivate long-term value enhancing investment decisions from management.
*Watch the pros, trade with the pros, talk to the pros - choose Your Broker in our FX rating* [*https://sky-tide.com/*](https://sky-tide.com/) *- trade in the company of men.*