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Stocks & bonds are investing in growing a business.
by skookumchuck 9y ago
Stocks & bonds are investing in growing a business.
- cmurf 9y agoOnly IPOs transfers cash directly to a growing business, all other stock trades are shareholder trades, the company sees none of that money. Corporate bonds do help grow businesses, but these are dwarfed by government bonds, which are just another way of transferring money from the vast majority of living and future generations, to a tiny number of current living people.
- 1123581321 9y agoThe part about trading not mattering to companies isn't true. One, companies issue additional shares after IPO. Two, the fluidity and likely future viability of the market affects IPO feasibility and price. Three, stock price affects employee compensation. Four, companies that own shares in other companies benefit from liquid markets just like retail investors. Corporate bonds also trade on the secondary market and that has similar consequences.
- skookumchuck 9y agoAlso, if trading didn't matter, corporations wouldn't be so concerned about the stock price.
- 1123581321 9y agoThey might actually be more concerned. Look at startup valuation for an example of how they might behave.