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Old 10-12-2007, 12:16 PM
Phone Booth Phone Booth is offline
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Join Date: Aug 2006
Posts: 241
Default Re: some weird moral questions...

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But I wanted to point out that what you say is not entirely true either, there are lots of reasons for the company to care about their stock price even though there is no direct revenue link once its in a secondary market.

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More specifically, companies are generally always issuing new shares in the form of equity compensation. Higher stock prices can therefore directly help companies' bottom line in the form of either lower cash outlay for compensation or less share dilution. On the other hand, cash-rich companies may sometimes prefer that their shares be undervalued, so that they can buy back shares and reduce their cost of capital.
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