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> the company shouldn't worry or care about its share price in the secondary market But "the company" is literally owned by people who buy & sell portions of i
by mi100hael 9y ago
> the company shouldn't worry or care about its share price in the secondary market
But "the company" is literally owned by people who buy & sell portions of it in the second market. There are only two reasons to buy shares of a company: dividends and price gains. Owners of company first and foremost want their investment to appreciate not depreciate, ergo company cares about share price first and foremost.
- gnaritas 9y agoAnd that's the problem of managing a public company, share holders care about the wrong thing; they've confused the tail with the dog which is what leads public companies to do stupid shit that hurts the business long term to pump up the share price short term. Look, I don't need you to explain how companies work, I'm fully aware, you don't seem to realize I'm critiquing how they work, I'm not lacking in understanding, I'm simply pointing out how the incentives are perverse and lead to companies doing the wrong thing.