If a company wants to raise the value of it's stock , can't they just make more shares available?

Question

What I mean is if there are 3,000 shares of stock from a company available to the public

and each share is selling for $100.00

Then the market value of each share is worth what? $30 ? or what ?

Can they just make more shares available if the company wants to raise their stock prices?

Answer 1

If a company issues more shares it will drive the price of the stock down, since they would be increasing the supply without increasing the demand

Companies can not just issue new stock, they must apply and obtain approval from the Securities & Exchange Commission.

Answer 2

Wow, if you are as knowledgeable about poker as stocks, I'm getting up a game and giving you an invite.

If "each share is selling for $100.00" and there is a piddly "3,000 shares" then (100 x 3000) the "market value" is $300,000.

Market value is a bit bogus anyway, but it is a common benchmark, so you multiply the current price times the number of outstanding shares.

The basic matter of economics is the interplay between supply and demand. Increase demand, with supply fixed, then the price necessarily goes up. Increase supply with demand fixed (your example) then price (sorry) goes down.

Governments sometimes get accused of doing what you are saying, and it does work, sort of. If some country merely printed up more cash, then the (face) value would rise, but the intrinsic value drop, it is now worth less because there are more dollars or whatever chasing the previously available goods (see economic example above). If you want the value of the stock to rise, there are two primary efforts to take: (1) reduce the shares outstanding, or (2, and best) do the kind of business that makes more profits. If the company makes more profit, then more people will want to own it, the demand for the stock rises (see example above).

Answer 3

No, for the same reason the Fed just can't print more money to make the dollar worth more.  It actually makes it worth less cause there are more out there.

Think about a rare collectible.  If there are only 100 in existance they are rare and expensive.  But if someone finds a 100 more in their dead grandmother's attic then all of a sudden there are twice as many of those collectibles on the market and they are cheaper and easier to get.

Answer 4

No, not really. By releasing more stocks, they actually will decrease the value of each.

A common method of increasing the number of stocks is splitting them. So, if there were initially 100 stocks issued, splitting them creates 200 stocks. However, the value of each stock is halved.

Answer 5

You dilute the outstanding shares by issuing new shares.  Driving down the price.  This is why companies buy back outstanding shares.

Basically supply and demand, if there is more of supply then demand the price shoots down.