Public investors can earn money by playing with stock prices. When a company wants capital to run projects, she can do an IPO. The initial price depending on the financial situation. Initial stock price was 20 dollars and public investors paid 20 dollars which got into the capital of the companies.

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I saw only 2 easy solutions: The main issue is if they want to raise capital a second time. The secondary market does not affect the company itself, but it affects its investors.

And as investors are important, they need to be treated well. Another problem related to this is that several employees in the company have stock options, so it really affects them. What companies can do also is buy their own stocks if the price dropped considerably.

This is not something that happens right after the IPO because it would make no sense to return the money to the markets right after you received it. So, to sum up, the direct effects for the company are on the primary market when the company makes the IPO , the secondary market is between public investors that have little to do with the company.

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As far as I can understand: Stock options are used to increase the capital of companies to realize some projects Shares are divided into two categories: Adrien Coulon 16 3. Stock options can be used for raising capital - quite often in some kind of debt swap agreement, but they are also used for a lot of other things as well.

Employee renumeration, tax avoidance f. Diego Jancic 4 9.

Another thing coming to my mind is: If i have a high value for my own stocks. I can use it to buy other companies or whatever no?

It can save some cash for the company. AdrienCoulon Not sure if I understand. A company can always invest in other companies and that will be reflected in the balance sheets.

However, it really doesn't matter the value of your own stocks as it doesn't affect the cash you have available to buy other companies.

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Remember that the public stocks are not yours, so it really does not affect what you can or cannot do with the cash or other short-term assets you have.

In fact, paying with all-stock could be a signal that the stock is overvalued in fact, there's research suggesting stocks of acquirers that paid cash tend to outperform those that paid stock over the 5-year period following a merger.

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