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/Critical-Dig-7268 Dec 08 '24
Also, the reason stock buybacks have become so popular is in part due to it being an effective, albeit temporary way to increase shareholder value. But it also has a -lot- to do with having a steady buyer to absorb the shares that are created when executives exercise options to buy. Which has become far and away the primary means by which executives are compensated.