How does buying stocks actually help a company when every trader seeks to eventually sell at a higher price?

[Anonymous Anonymous]

Answer my fucking question, not insult me. I'd bet less than 20% of share holders give a crap about the company they invest in, they just want the easy profit.

[Rusty Plastic]

Is that what you think? That every trader wants to sell their stocks for profit? What about the people who buy up stocks to own a part of the company?

[Philip]

Stocks generate immediate income to the company when the company sells the shared in the primary market. As when an investment bank purchases the shares and turns around and sells those shares in the secondary market to individual investors. When there are more buyers than Sellers for those shares in the secondary market, the price will be bid up and up and up creating more equity for the company and consequently for the shareholders.

[David]

You already know the answer, so why ask the question then berate those that take their time to give you an alternative answer?

You've made an irrational statement and inaccurate conclusion posed as a question. This badly posed question does not really deserve an answer, for several reasons.

"Every trader" has their own individual reason for buying stock, and plans for that stock. Your presumption that you know why "every trader" buys stock is as irrational as your statement. Traders have no intent of benefiting the company by purchasing stock, so the two can't really be correlated. Some traders buy stock to hold for retirement in 30 years, some buy it to pass on to their kids with no intention of selling at all. Neither actively trading or holding for investment effects the company any more or less than the other. Many traders sell stock short, again, for various reasons and time periods.

There are indirect effects of trading, both plus and minus, that generally cancel each other out with price fluctuation. Certainly, trading in the stock CAN benefit the company, like the bidding up of Apple stock over $700 increases the value of the company, and trading can hurt the value of a company through short sales, like Facebook. But that has nothing to do with the "intent" of the trader, or the reason a trader bought or sold shares. In every "trade" there's a buyer and seller, so which trader are you referring to? Just the "buyers"? Some are simply hedging, or must trade because it's their job to take the other side of the trade, thus, your question/statement/presumption is inherently false and irrational.

Some companies actively try to increase shareholder value in several ways, like dividends, some companies could care less what the price of their stock is at any time.

A trader is accurate and specific, not vague and general and irrational, and using labels in place of knowledge without definition, so you obviously know nothing about whom a trader is.

Your presumption/statement/question is simply a mixed up fallacy.

In an attempt to answer your illogical question directly, trading in the secondary market does not "help a company" because the company is in the primary market. The two are loosely related, but not correlated. Rather than "helping" the value of the company, traders are trying to determine the value of the company. It is a process of discovery by traders, not an attempt at control or effect.

Ask a legitimate and specific question without illogical and irrational presumption and insulting fallacy about "every trader," and you'll get a legitimate and specific answer.

[i like turtles]

I know you're not happy with the answers, but your question is nonsensical and pretty much irrelevant to anyone who invests.