Why should companies care about their stock price after the initial purchase offering (IPO) as it trades on the secondary market?
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*** Original Work Only*** For written posts, your initial posting should be at least 1 page in length/275 words minimum (NOT including the References). Please copy and paste into the forum and do not post as an attachment. Each reply to peers should be a minimum of .25 pages/75 words.All posts should follow formal APA style for citations at end of text, proper grammar, and logical writing.Please include at least two (2) outside resources to support your concepts. In addition to our text, please find an outside article for your second source that is related to your concepts. The article should be from a professional journal or source and should be current (< two years).
Answer
IPO and Stock Prices An Initial Public Offering is where a private corporation sells its stock shares to the public. Th stock price depends on IPO in that the price will vary in terms of newness or existence of shares held by a company. Hence, IPO helps the company in financing and pricing, where it gets to gauge a realistic stock price that will sell in the market (Kielmas, 2020). Often, investors accept prices lower than the expectation of the companys owner. However, pricing the stock too high can cause the stock price to fall. However, new shares hurt stock prices by diluting the shares and reduce the per-sale return. Hence, companies care about their stock price after IPO to gauge their performance. If the stock price has plummeted, it is an indication that the company is performing p...
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