3 ms·
Publicly traded companies also don’t have to increase profit margins. They generally do, but so do privately traded companies.
by brookst 3y ago
Publicly traded companies also don’t have to increase profit margins. They generally do, but so do privately traded companies.
- Hemospectrum 3y agoIncreasing profit margins is a reliable way to increase stock prices, which is (at this stage of capitalism) the most powerful force directing the allocation of capital. It's a self-reinforcing feedback loop with far-reaching power throughout the economy.
- brookst 3y agoAllocation of capital matters for startups. Most large companies aren’t issuing new stock, so profit margins only affect secondary markets for their stock.