[mahogany]

How does buying shares support a company financially? My understanding of the stock market is that buying shares would only help a company during a time when they issue new shares to raise capital, like during an IPO. Are there other ways it helps them?

[FredPret]

Buying (and holding) reduces the number of outstanding shares, which supports the share price. So when the business needs cash to invest in new car research, they can issue shares at the higher price. This is exactly what happened at Tesla and also Gamestop. Now, they have so much cash, they are pretty much guaranteed to not fail.

Even a single large, stable investor like Warren Buffett can be a huge help for a company for this reason.

[mahogany]

Thanks, I didn't realize issuing new shares after being public was a relatively common activity.