Why should a company give a shit what shareholders think/feel? Why should they try to please shareholders exactly? I mean, they're not the ones that are working, they just put money in and do fuck all and expect money to come out.
Is this fair logic?
If they pull their money out the company has less funds to put to other tasks.
They already have the money though. If the stock price drops to $0.01 the company doesn't give a fuck.
This, why does a company give a shit if the shareholders get fucked once they recieve $50m from shareholders? end of the day it's the shareholders that lose money and not the company if they have already made out with the $50m?
I don't think you understand how stock price works. If the stock price drops to $.01, that means the company is doing really poorly and is practically bankrupt (think Radioshack).
A stock price and the company's earnings are correlated.
Because the company owns most of the shares.
If everyone else pulls out, they take a massive hit on their own holdings. Plus they'll then become the target of activist investors, bear raids, etc.
>why should companies give a shit about mantaining one of their major methods of raising capital
>why should a company give a shit about the owners of the company
>Why should a company give a shit what shareholders think/feel?
That's funny.
Try telling Henry Ford that when he tried to implement the 30 hour work week.
Same reason you have to pay back a loan.
Even ignoring legal action (which shareholders can also pursue if you lie to them or intentionally fuck them over), your credit score will prevent you from ever owning anything of value in your life.
This + the new trend to give CEOs equity over salary so they maximize profits.
Furthermore a company not working towards the shareholder's best interest can be replaced by shareholders.
List all the successful businesses which told their shareholders to fuck off and doesn't pay a divdend.
Berkshire Hathaway
Amazon
Google
Stop with the dividend meme. The only companies that pay dividends are the one's too stupid or too old to invest their profits in growing the business. Not to mention its horribly tax-inefficient to shareholders. Paying dividends is like giving shareholders AIDS.
Because they can fire the board of directors. Who in turn can fire everyone in the company.
Because whoever created the business most likely owns a large fraction of those shares. If they go low then the original owner(s) loses massively.
this. OP has no fucking clue what hes talking about.
once a company goes public, guess what its public. it is now an independent entity solely driven by its shareholder base to make money. now, ofc, certain shareholders will carry more influence. but at the end of the day, it is just this ...vehicle, and the world gets to try to drive it to the moon
>average public can't run a business
>put them in charge of the biggest ones
it's like democracy all over again
If you're google or facebook or the S.S. Buffett, you don't have to, because the majority of voting power still lies in the hands of your founders/executives.
Upside is that you can ignore all the uppity activist shareholders who want to interject their opinions into how your company is run. If you're a visionary, forward-looking CEO that's the head of one of the largest tech companies in America, this is great, because shareholders are retards and shouldn't question your visionary leadership.
Downside is that if some retard replaces Sergey Brin/Eric Schmidt at Google, Zucc at the FB, or Buffet at Berkshire Hathaway, there's not much stopping them from running the company, and its stock price, to the ground.
If the value true value of the company is more than the market cap, someone would literally buy the company and collect the revenue or liquidate the assets.
imho stock dividends in non-voting shares are a nice compromise,
You are such a fucking idiot. The shareholders literally OWN the company. Pleasing them is the ONLY thing that matters.
Because shareholders own the company dumbfuck. If the share's drop to $0.1 someone will perfrom a hostile takeover on the company and just liquidise it
I've asked the same question, and I've gotten the same answers....
Not if the original owner got them for cheaper, or extracted all the value input into the company from the other shareholders via other means.
You can't buy what's not for sale. If the CEO, for example, owns the majority of shares and doesn't sell them, then you can't buy the company.
>imho stock dividends in non-voting shares are a nice compromise,
Yes, preferred shares are legitimate. But I don't really think of it as dividends in that case, because its really more a financing tool than a distribution of excess profits. Preferred stock has more in common with bonds than with common stock.
when companies go public, the sign a lot of documents. One of those probably has something to do with doing what is in the best interest of the share holders, since it is the share holders that own the company.
That's kind of the point though. One of the two scenarios you described must be true. Either the operators of the business do not own a majority of the shares and are liable to get taken over, or they do own a majority of the shares and will feel the most pain when they tank. Disclosure laws exist to prevent them from rapidly moving between those positions.
If they fuck up, they have to choose between eating bad cake or having their cake taken away from them.
>One of those probably has something to do with doing what is in the best interest of the share holders
They don't have to sign anything. It's called "fiduciary duty" and its the law for every business enterprise in the country.