5 Reasons Why Companies Care About Their Stock Prices

AAA

Typically, companies issue shares to the public and receive their money up front. Investors then either make profits or suffer losses depending on the performance of the stock. The original company that issues the stock does not participate in any profits or losses resulting from these transactions because this company has no vested monetary interest. This is what confuses many people. Why then does a company, or more specifically its management, care about a stock's performance in the secondary market when this company has already received its money in the IPO? Read on to find out.
  1. No results found.
Related Articles
  1. Financial Advisor

    Why Do Companies Care About Their Stock Price?

    There are several reasons a company may care about keeping a high and rising price.
  2. Investing

    Why Do Companies Care About Their Stock Prices?

    Find out how a company's stock price reflects its value to internal and external shareholders.
  3. Insurance

    Long-Term Care Insurance: What You Need to Know

    Planning ahead for long-term care costs should be part of a financial plan.
  4. Financial Advisor

    Advising FAs: How To Explaining Stocks to a Client

    Without a doubt, common stocks are one of the greatest tools ever invented for building wealth.
  5. Insurance

    Initial Public Offering (IPO) Explained

    An initial public offering (IPO) marks the start of a company's publicly traded life. Find out why companies undergo IPOs, and how the process works.
  6. Insights

    Why Are Companies Taking Longer To Go Public?

    Learn why private companies are waiting longer to have their IPOs. Understand why it may be more advantageous for a company to stay private.
  7. Insurance

    Long-Term Care Insurance: What to Consider

    Long-term care may be a wild card in your financial plan, but at the very least, it should be discussed with your financial advisor.
  8. Investing

    What is a Public Company?

    A public company has sold stock to the public through an initial public offering (IPO) and that stock is currently traded on a public stock exchange.
  9. Investing

    Earnings Per Share Explained

    Earnings per share is one of the most carefully followed metrics in investing. We show you why this ratio matters and how to calculate it.
  10. Investing

    What Are Stocks?

    Stocks are one of the most popular financial instruments in the world, but what does a stock actually represent? Find out how and why stocks are created, and what buying a stock means for investors. ...
Hot Definitions
  1. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an ...
  2. Salvage Value

    The estimated value that an asset will realize upon its sale at the end of its useful life. The value is used in accounting ...
  3. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  4. Promissory Note

    A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on ...
  5. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  6. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
Trading Center