The company doesn’t care if the stock price hits $1. If the company is paying it’s bills, it just continues. It’s the people who hold shares that care. The company doesn’t hold shares in itself.
Enron collapsed because the company financials collapsed, not because the stock price collapsed. That happened after all the bad accounting practises and hidden debt came to light. Now, in that case the shareholders succeeded in suing for their losses, but they only had a case because of the mismanagement.
The company absolutely does own shares of itself and it’s ability to secure credit and just engage in business in general depends of the value of that holding.
No. The board can decide to issue more shares, but this is a sub-dividing of the already issued shares and so normally requires a vote from the shareholders. Major shareholders normally sit on the board, so the two groups overlap but are legally distinct.
If a company buys it own shares, it’s normally a “buyback” and the shares cease to exist.
The company doesn’t care if the stock price hits $1. If the company is paying it’s bills, it just continues. It’s the people who hold shares that care. The company doesn’t hold shares in itself.
Enron collapsed because the company financials collapsed, not because the stock price collapsed. That happened after all the bad accounting practises and hidden debt came to light. Now, in that case the shareholders succeeded in suing for their losses, but they only had a case because of the mismanagement.
The company absolutely does own shares of itself and it’s ability to secure credit and just engage in business in general depends of the value of that holding.
No. The board can decide to issue more shares, but this is a sub-dividing of the already issued shares and so normally requires a vote from the shareholders. Major shareholders normally sit on the board, so the two groups overlap but are legally distinct.
If a company buys it own shares, it’s normally a “buyback” and the shares cease to exist.
It does impact employee morale when they get paid with stock incentives and they go to zero.
Of course. They are shareholders.
The company is a separate legal entity though.