Re:Why is the stock market rallying when the economy is so bad?
by javagram on Sunday May 10, 2020 @09:43PM
(#23138102)
> Companies don't even get the money from secondary stock purchases, so the invested money is doing absolutely nothing.
But they can issue new stock at the inflated values to fund expansion, which itself allows the company to grow profits and potentially grow future dividends. E.g. Tesla stock price quadrupled over the last year and then Tesla issued $2 billion worth of new shares in February.
But they can issue new stock at the inflated values to fund expansion, which itself allows the company to grow profits and potentially grow future dividends. E.g. Tesla stock price quadrupled over the last year and then Tesla issued $2 billion worth of new shares in February.