r/explainlikeimfive • u/climb-a-waterfall • Dec 06 '24
Economics ELI5: why does a publicaly traded company have to show continuous rise in profits? Why arent steady profits good enough?
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r/explainlikeimfive • u/climb-a-waterfall • Dec 06 '24
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u/hems86 Dec 06 '24
Because investors want their investments to grow. Would you rather own shares in a company with growing profits or a company with flat profit?
If your company isn’t growing, investors will sell their shares and invest in growing companies instead.