[xeromal]

So I'm a big dummy, but I STILL don't understand how current stock price affects companies. They've already raised their money. How does the stock going down make them lose money other than lowering their chance at another seed round?

[jiveturkey]

the stock price is a trailing indicator of the company’s health. in the case of headcount, you hire based on growth rate, to sustain and even further that growth. it works until it doesn’t. then you fire.

it’s no skin off the company’s back, so it is the correct strategy. when CEOs (the world over) say they overhired AND that it was a mistake, it’s a pitiful political lie. also a mandatory strategy. you can’t say, “employees are cogs. we planned this shit. this was plan A.”. you wouldn’t be able to hire again when you find your stride.

[crackercrews]

They use it for compensation and acquisitions so having a higher price makes these things cheaper.

Also if shareholders lose confidence they can oust the leadership.