Why Do Companies Care About Their Stock Price?
many companies try hard to promote their stock and boost their share price, but why? there are several reasons a company may care about keeping a high and rising price. self-interest is a major factor and management's interests in the stock price. many executives get a large part of their compensation from stock awards and options. the more the stock is worth, the more those holdings are worth. a high stock price can also bring job security. shareholders don't complain about the leadership of high flying companies, but a stock ? can lead to a ceo losing his or her job. there are also solid business reasons for wanting a high stock price. many publicly traded companies operate a business model that requires additional infusions of cash, and a high stock price allows a company to raise more money with less dilution. a high stock price can also make those shares more attractive as currency in a merger or acquisition, allowing the company to expand its operations ?. last and not least, never underestimate the power of ego and prestige when ? comes to a company and its stock price. ceos know each other, go for each other and compete with each other and a relative value of each company stock is certainly a talking point. no one wants to be laughed at ?.