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  1. The company uses that money from the IPO to invest in projects to make more money. Sort of like if you borrowed money from a bank to start a business, except you can raise more money than you can borrow from a bank and you dont have to pay it back. The money goes into the business. After the IPO the company is supported by its earnings vis a vis the money invested. A wide range of investors now own the company. And they care about the stock price and the earnings. If the company is making a profit and has no opportunities to reinvest those profits in the business, then they may pay out some of those profits in dividends. Its a simple concept.