tag:blogger.com,1999:blog-2822678093661476153.post9041058727100419435..comments2023-10-21T03:53:43.281-04:00Comments on Where's Luke?: Taking StockOpen Barhttp://www.blogger.com/profile/01296373954499786645noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2822678093661476153.post-58671784750758341562007-04-28T23:00:00.000-04:002007-04-28T23:00:00.000-04:00I agree with you that it isn't a silly question.Tr...I agree with you that it isn't a silly question.<BR/><BR/>Truth be told, if you sell $1000 of company equity for $1000 of cash, you haven't profited at all. You've just gained liquidity.<BR/><BR/>In my opinion, post-IPO sales on the public market are generally *not* as beneficial to the company as they're made out to be.<BR/><BR/>There are circumstances where a high stock price is great:<BR/><BR/>* If you are temporarily overpriced (i.e. if the stock price is $75 and you feel that is overvalued, you could sell stock, buy back at $50, and have $25 profit)<BR/>* If you want to acquire another firm, you can give up a much smaller percentage of your company to do so.<BR/><BR/>Of course, it goes without saying that high stock prices are great for the shareholders. And, once you go public, you answer to people who *only* care about getting the stock price and/or dividends as high as possible.<BR/><BR/>Truth be told, stock price doesn't say anything except that, at that instant, one person thought it was overpriced and another thought it was underpriced and this is where they compromised.Joe Grossberghttps://www.blogger.com/profile/16355362807496413582noreply@blogger.comtag:blogger.com,1999:blog-2822678093661476153.post-62684008690996185752007-04-28T20:36:00.000-04:002007-04-28T20:36:00.000-04:00It seems to me like the 3rd and 5th reasons are th...It seems to me like the 3rd and 5th reasons are the real ones why they actually care. A lot of the shares of stock are tied up either nominally by the company or directly by some percentage of the emplyees. Either the executives and partners or in more progressive companies by a good percentage of the employees. Having stock options is motivation for your company to do well and drive the price even higher.ChuckJerryhttps://www.blogger.com/profile/16596845287728762643noreply@blogger.com