Other than lower bonuses for employees. Why would this be bad for IBM to have a lower stock price?
I understood all the terms, but I wouldn’t know the reasoning behind why it is important to be listed in certain places.
I understood all the terms, but I wouldn’t know the reasoning behind why it is important to be listed in certain places.
As an IBM executive, you don't want some PE firm becoming majority owner and replacing you with someone else.
I.e. +50% shares need to be outstanding (assuming nothing is owned by the hostile PE firm).
But more relevantly to IBM's case, the top shareholders are also the top executives. [1]
So, in this case, the stock price going down affects them direcly.
[1] https://www.investopedia.com/articles/insights/052216/top-5-...
When the stock price drops precipitously, they lose money instead. When the stock price falls so low that they fall out of indexes, it will then go even lower, as the companies which hold the stock in an attempt to mimic an index (index funds, etc) switch to getting rid of it instead, which means selling more of it to an already-skeptical public.
You are confusing the means to an end with the end itself.
Having a lower stock price means it has a smaller leverage on those things.