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Re: bro post# 10970

Monday, 12/21/2009 1:45:03 PM

Monday, December 21, 2009 1:45:03 PM

Post# of 46244
bro, You're wrong IMO. The company does have shareholders' money, indirectly. Here's why... because the SHAREHOLDERS (i.e. the market for the stock) is THE reason why the company can raise funds via equity offering.

If a financier feels there's enough of a market for the stock, then they'll enter into a funding agreement. They'll receive shares, and they have fait that there are enough of us out here that they can sell those shares someday. So, really, the company is indirectly receiving or using our money since we buy the shares they issue to fiananciers. Conversely, imagine if there were NO shareholders and no market for this stock... do you think ANY financiers would agree to receive shares in exchange for cash/funding? We both know that answer. This is exactly why the co is public in the first place.

That's how it works. If it didn't work that way, then they wouldn't leverage equity (stock) to get funding for operations. Instead, they'd get private loans not based on company stock as the backdrop.

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