Hacker News new | ask | show | jobs
by umanwizard 3223 days ago
How is buying a company's stock "financially supporting" them?
3 comments

Companies, and the people that run them, own a lot of that stock. By buying some, you're increasing the demand, and therefore the price, and therefore the amount of value owned by the company and its leadership.
Decreasing the company's cost of equity capital...
Directly
How? Buying stock doesn't transfer any money to the company (unless it's newly issued stock)
The act of buying stock signals demand and reduces supply, which will effectively cause the price to rise. Indirectly, rising stock prices are a positive indicator for the health of the company. Directly, if the company chooses to sell stock, it will be able to sell it at the higher price.