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Politics : America Under Siege: The End of Innocence
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To: Qone0 who wrote (5533)9/28/2001 7:10:17 PM
From: joseph krinsky   of 27666
 
Bob- Under certain circumstances* you could be correct, but remember once the stock is in the float, no money goes to the company, it doesn't do anything other than change hands, from one person to another.

Where it hurts is that it creates shares, diluting the prices, which in turn makes things "cost" more if they want to use stock for acquisitions, or if they want to sell stock to raise capital. (a lower price means they have to issue more stock)

*IPO's, new issues, basically new stock that the money goes to the company. when a stock is shorted then, it siphons off money that would go to the company.
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