Investors in the stock market...?

Question

Do Investors in the stock market have a benifical or harmful effect on the companies whoes stock they buy and sell?

Answer 1

indivdual investors like you and me no. Its the hedge fund and mutual fund investors pushing heavy weight around that can effect the market

Answer 2

If the general public goes into a stock they have no effect on the company who's stock they are buying

It's only very large investors or special groups that could have an effect on the company

Answer 3

too broad of a question.. could be both in certain circumstances..

investors can derail a company or push one into the stratosphere..

Answer 4

"Investors"? Investing is a specific term and their effect on a company generally ranges from beneficial to benign. Traders (speculators), on the other hand, are beneficial to the degree that they provide some needed liquidity to those who want to buy or sell a company (as in get in, or get out) stock, but in that they may drive attention away from what the company actually does by punishing prices when the accounting reports are not to their liking or rewarding them excessively when news is favorable, yes, traders can be a problem for a company.

For the most part, were I a CEO of a corporation (and I'm not) I would probably start with the perception that my business is the company's best business, letting the stock prices, whatever they may be, fall where they may. However, the stockholders own the company, so they (especially those with substantial holdings) will want me to change my point of view from a market perspective. Some people see earnings per share and book value (as in equity per share) as the proper benchmarks, as in if those numbers are rising the other (as in market value) will come along eventually. But many are more interested in the superficial at the moment, what would the value be if I sold today, in relation to what I bought it at, whenever that was.

So it is sort of like how some men see the women they want to have as their bride. To some guys the issue is how she looks. To others, the poor girl may be as ugly as a mud fence, "but boy can she cook!"

So, it depends on the "investor" and his or her expectations, so it tends to so it tends to run the range.