ABQShredHead
©1970
Most businesses, though, cannot run simply on the profits they make. They need start-up cash in order to get into business first; and, then they must repay those debts, get new investors to increase capital, and pay out on the investments of the investors.
Company revenues are then used to pay the company's workforce and other operational expenses. The money left over, the margins, are what attract more investors to a firm. By reducing opex, you increase margins, thereby increasing your company's attractiveness to more investors. More investors then give you the capital money to expand your business.
Business will not run without investors, whether it's money from your parents to buy the lemonade to open a lemonade stand in front of your house or millions of dollars to buy equipment and hardware required for your workers to do their daily jobs.
That said, there are plenty of people who look to make a quick dollar off the stock market. Some people do. Lots of people don't. And when they don't, they get desparate, moving their cash from corporation to corporation, at times causing panic in other investors if a large enough number of people are pulling cash out of a company. It's a vicious cycle, for sure. I think what I can add to your argument is that Wall Street needs better principled people investing in corporations.
Company revenues are then used to pay the company's workforce and other operational expenses. The money left over, the margins, are what attract more investors to a firm. By reducing opex, you increase margins, thereby increasing your company's attractiveness to more investors. More investors then give you the capital money to expand your business.
Business will not run without investors, whether it's money from your parents to buy the lemonade to open a lemonade stand in front of your house or millions of dollars to buy equipment and hardware required for your workers to do their daily jobs.
That said, there are plenty of people who look to make a quick dollar off the stock market. Some people do. Lots of people don't. And when they don't, they get desparate, moving their cash from corporation to corporation, at times causing panic in other investors if a large enough number of people are pulling cash out of a company. It's a vicious cycle, for sure. I think what I can add to your argument is that Wall Street needs better principled people investing in corporations.