Chapter 758: First Conversation
Strictly speaking, no publicly listed company is ever entirely free of problems.
The purpose of going public isn’t to demonstrate some grand ideal. Simply put, it’s to extract money from retail investors.
A listed company’s shares are divided into two categories. One part is held by shareholders—these shares are not traded easily. The other part consists of publicly tradable shares issued during the listing. These are actively traded on the market and determine the company’s stock price.
No matter how capitalists or listed companies spin it—claiming buying stocks is an investment—in truth, it’s all about making people believe they can profit from buying their stock.
The more popular the stock, the higher its price, the greater the company’s market value, and the more valuable the shareholders’ equity becomes.
That’s why most listed companies focus on inflating stock prices after going public—it’s far quicker than making actual profits.
A company might only net a few million in profit after a year of hard work, but if they can push the stock price up by just 5 or 10 percent, their market cap gains could far exceed their annual earnings.
This is one of the main reasons why modern capital tends to flow into finance: investors can reap large returns without enduring long-term operations—though they might also end up being the ones harvested.
How to make a stock popular? It’s simple: falsify financial reports, inflate sales numbers, and engage in strategic hype.