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>Now I have to pay some premium because of something that has nothing to do with the value of my company? The value of your company is decided by the market pa

>Now I have to pay some premium because of something that has nothing to do with the value of my company? The value of your company is decided by the market participants with supply and demand. There's the academic idea that your company can be valued by your profits and losses, but the truth is, those more less to do with with the value of your company than the potentially demand for your shares. In other words being in an ETF may be more relevant to your stock price than the debt on your balance sheet. >* Why do I care what the share price is or what volume of sales is occuring on the stocks around me?* You might not care, but the other 40% might. It's tempting to think the other 40% is just amorphous group of shareholders, but it's likely it includes your business partners, or employees who will want to see the stock rise so they can eventually sell. And those partners and employees, upon learning that you aren't maximizing their shares may choose to leave, ultimately damaging your business. In other words, once you have multiple owners, as long as the green line goes up, everyone is incentivized to continue doing well.

vhanda 2y ago
Wouldn't the share holders care more about the profits of the company which are then being given as dividends instead of the price they can trade the share price at? Isn't the amount of profit the company is making (and how that will change) what matters and not what its share price is?
- nemothekid 2y ago
  Most companies don't pay out dividends. Google paid out its first dividend in 25 years and it's only 20 cents a share. Your wealth increases faster from the share price going up vs a dividend and it's not even close. Couple that with the fact that you don't have to sell - you can just borrow against your shares to get liquidity, most are far more incentivized to care about the stock price.

vhanda 2y ago

Wouldn't the share holders care more about the profits of the company which are then being given as dividends instead of the price they can trade the share price at? Isn't the amount of profit the company is making (and how that will change) what matters and not what its share price is?

nemothekid 2y ago
Most companies don't pay out dividends. Google paid out its first dividend in 25 years and it's only 20 cents a share. Your wealth increases faster from the share price going up vs a dividend and it's not even close. Couple that with the fact that you don't have to sell - you can just borrow against your shares to get liquidity, most are far more incentivized to care about the stock price.