| why do officers care so much about keeping share price up? |
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dstites80
New Poster
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| why do officers care so much about keeping share price up? |
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Officers of a company decide to go public to raise a large amount of capital through a one-time selling of shares. So why is it that they are so concerned with meeting earnings expectations and keeping the share price up after the IPO has already gone through. They've already gotten the money they desired through the IPO, so what do they care if the shares go down. Is it just a moral obligation? Is it b/c the officers hold stock in the company as well? Other than this, are there any reasons? I don't see how the share price going down could directly affect the financial well-being of the company...
Thanks,
Dan
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Tue Jul 25, 2006 6:03 pm |
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efflandt
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Location: Elgin, IL USA
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One reason they may want to keep share price up is because officers usually own shares of their company and/or officers and employees may get options or stock as part of their compensation or towards their retirement plan.
Share price going down may not affect the company directly, but it can affect the assets of the officers or employees if they are invested in their own company. While sometimes they may sell some stock to pay the taxes on it, or buy a home, or to diversify, if they are NOT invested in their own company or dump most of their own company stock, that could be a warning sign.
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Tue Jul 25, 2006 11:46 pm |
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