Okay, so as I understand it, when a company makes an IPO, it does so on a primary market - i.e. it is the company itself selling the stocks. It takes home the money.
When you or I trade stocks, we're using an exchange - secondary market, meaning you and I trade with other you's and I's, and not the company itself.
I thought that the companies continued to make money from stocks being traded, so if I bought 10 shares of AMZN, Amazon would be getting that money, but apparently not since they made their money in the IPO, and really it goes to Joe Smith who wants to get rid of his AMZN?
So, apart from the equity that the employees/owners of the company have in the company, why do they care about stock prices? Why is it bad if it goes down (from the company's perspective)? Does the company itself own some of that stock and can therefore liquidate for capital if needed?
Submitted March 05, 2019 at 02:58AM by mynamemyplane https://ift.tt/2Ump99g
