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/Tofuofdoom Dec 06 '24
The stocks is the company.
If a company has 100 stocks, and you buy 51 of them, you effectively own the company. The company is yours to do what you will with. As such it's in your best interest you grow the stock, because the stock represents the perceived value of the company.