How do companies profit from selling shares?
Juliane asks:
I am wondering if-and then how-a corporation continues to make money off its shares sold in the market. More specifically, once initial shares are sold, does a corp. continue to make $ every time the shares are traded? If not, can a corp. offer a new batch of shares any time it needs capital and, if so, is this considered a new IPO (if not, how would an investor know about the new shares)?
I am wondering if-and then how-a corporation continues to make money off its shares sold in the market. More specifically, once initial shares are sold, does a corp. continue to make $ every time the shares are traded? If not, can a corp. offer a new batch of shares any time it needs capital and, if so, is this considered a new IPO (if not, how would an investor know about the new shares)?
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You don’t really make a profit by selling shares. You use this for raising capital. If you’ve authorized shares, you can offer new “batches” to raise more capital.