Why Companies Use Stock Exchanges: How Public Markets Finance Growth And Shape The Economy
Capital Markets And Business Analysis By Zeeglobalvision | Stock Exchanges, Public Companies, Investor Ownership And Economic Growth Companies do not normally enter a stock exchange simply to “buy and sell stocks.” They use public equity markets for a much larger purpose: to connect corporate growth with outside capital. A company can sell newly issued shares to investors to raise money for expansion, new products, acquisitions, debt reduction, facilities or other long-term needs. Once the shares are listed, investors can trade those shares with each other in the secondary market. That distinction matters because most daily stock-market trading does not send money directly to the company. The exchange creates liquidity, price discovery and a continuously updated market valuation. The company benefits indirectly from those functions and can sometimes return to the market later to issue additional shares. This is why stock exchanges are much more than electronic trading ...