3 ms·

How is buying a company's stock "financially supporting" them?

• pretendscholar 9y ago
  Directly
  • umanwizard 9y ago
    How? Buying stock doesn't transfer any money to the company (unless it's newly issued stock)
    • jsfitzsimmons 9y ago
      The act of buying stock signals demand and reduces supply, which will effectively cause the price to rise. Indirectly, rising stock prices are a positive indicator for the health of the company. Directly, if the company chooses to sell stock, it will be able to sell it at the higher price.
      • deleted 9y ago
        [deleted]
• jonny_eh 9y ago
  Companies, and the people that run them, own a lot of that stock. By buying some, you're increasing the demand, and therefore the price, and therefore the amount of value owned by the company and its leadership.
• DMac87 9y ago
  Decreasing the company's cost of equity capital...