Small Doubt

#1
Lakhs of shares are traded and crores of rupees exchange hands daily. So both buyers and sellers are involved and got benefitted depending upon their judgement.

My doubt is that, in light of these daily trading on every company stock, how company got benefitted directly?

I mean, sellers makes profit, buyers anticipates profit, brokers claim brokerage charge on every transaction but what about company?

Do company get any money (on daily or monthly basis or yearly basis), apart from their valuation in stock price and market reputation, when two persons/institutions trade their shares in the stock market. If yes, how much?

Traderji and senior members kindly pour your thoughts and comments.

Regards,
nkpanjiyar
 
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sh50

Active Member
#2
You seem to be very new to the stock market. The company does get directly benefited to the extent that the market value of its promoters increases tremendously when the share price increases. If the promoters of the company sell of their shares only then they get a direct benefit. Since they are generally large stakeholders and active in the market, this way they get benefitted.

Otherwise buying and selling transactions among others do not benefit the company at all. However the fact that the company's share is in demand augurs its goodwill which like brand though a non tangible asset has tremendous significance. If the company wants to come out with a public issue or even get a loan against shares, they can get benefited. Baically the company becomes more conspicous. All this is not of much significance in the short run but if the price increases quarter after quarter, it can really enhance the company's prestige.

One should always crosscheck though whether the rise is on account of performance or something else as the market often runs on sentiment.
 
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#3
Another thing is if company brings another issue in future, the premium on the face value is decided not only by basics of the company but also on their market value.. am I right!
 

Traderji

Super Moderator
#4
alok said:
Another thing is if company brings another issue in future, the premium on the face value is decided not only by basics of the company but also on their market value.. am I right!
That is correct. Having a share listed on the stock exchanges gives a valuation to the stock and promoters shareholding. Else you you not have Permji of Wipro listed as one of 10 most wealthiest man.
 

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