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What exactly do you mean by "feel pressures" on their stock? Once a share has been sold the company has already received all the money it will ever receive fro
by laichzeit0 11y ago
What exactly do you mean by "feel pressures" on their stock? Once a share has been sold the company has already received all the money it will ever receive from that share. Whether it goes up or down from that point is irrelevant to the company. For whoever bought that share it might be a problem if he wishes to sell it again. Most of the investors buy IPO shares for dividends, so as long as the company makes money and pays dividends they also don't care about the share price.
- WalterBright 11y ago> as long as the company makes money and pays dividends they also don't care about the share price. Oh, they care very much. For one thing, a tanking share price means the dividend will surely be cut. A rising share price means the dividend will likely increase.
- tinkerrr 11y agoDividends are paid from company earnings (profits), not stock, and as such, stock price doesn't affect the ability of the firm to pay dividends. They could both have the same underlying cause though - which is, a deteriorating business condition that reduces earnings. Otherwise, e.g. if Coke's stock price falls by 50% in a recession, doesn't mean it will cut its dividend.
- WalterBright 11y agoStock prices come from the same forces that shape dividends. There's a reason that dividends from diverse companies all tend to cluster around the same percentage of the share price.
- keymone 11y agoBonuses are often paid in stock units or options, so there is that pressure.
- thinkcontext 11y agoTrue but a weaker share price means it will be more expensive to access capital or bond markets or to get a loan. Coal is a very capital intensive industry so this is significant.