I’ve heard it stated that in order for a company to survive it must expand but it has never really been explained to me why that is.
I’ve heard it stated that in order for a company to survive it must expand but it has never really been explained to me why that is.
Investors buy shares in a company because they expect it to expand, and for the shares to gain value as the company becomes more valuable. Most companies can’t really exist without investors buying more shares.
Right investors. Forgot about those guys, thanks.
ackshually
except for high-risk companies that can’t much appeal to the debt markets it’s not so common for public companies to raise capital through secondary offerings / convertibles. in most cases shareholders buy their shares on secondary markets and the company itself doesn’t depend on its own stock price, at least for its operations and its balance sheet. management still seeks profits anyway bc the board is legally answerable to shareholders and shareholders usually want to make as much (risk-adjusted) profit as possible - that’s why they have their money parked in equity in the first place, no matter how they acquired their shares