Comment on What is an average person living in the US supposed to do about corporations raising prices?
andrewta@lemmy.world 5 months agowhy? honest question. if they are making record profits and their stock is going up why would you not buy their stock?
Timwi@kbin.social 5 months ago
Because you'll be investing in, and therefore helping that company. Only a small fraction of the company's profit is going to reach you. You'll be part of the problem with capitalism.
PlasterAnalyst@kbin.social 5 months ago
When you buy a stock that's already ipo'd you're not giving any money to the company.
Windex007@lemmy.world 5 months ago
That’s not really true.
If it were, why would a company care about their share price, post-IPO?
Although people generally conceptualize shares as an ownership of the company, there are a ton of mechanisms at play that make that notion essentially a farce.
It’s better to think of shares as a currency for which the company owns the printer. The reason companies want to keep their stock value high is that they can at-will conjure more shares from the ether and sell them. It’s not JUST during an IPO.
So, in a fractionally insignificant way, as a retail investor, every purchase adds buy pressure and shifts the order book towards a higher market price. The higher the market price, the more money the company can raise by issuing new shares while minimizing the dilution effect of the issuing of new shares.
andrewta@lemmy.world 5 months ago
Only in fantasy land can we think capitalism will go away. Might as well put my money where it will gain value for me. Not like they’ll suddenly go out of business if I don’t invest in them. Buy let it gain 5-6% then sell it.