How Small Market Traders Are Being Wooed by Firms

This has led to a strategy adjustment. Mr Schreiber said he not only spent time communicating with analysts whose buy or sell ratings for the stock could affect the price, but also conducted interviews with podcasts, websites and YouTube programs popular with retail investors.

“I think they are far more influential today and have far more supporters than the mighty Goldman Sachs when it comes to buying or selling stocks,” said Schreiber. “And we saw that in our own inventory.”

Academic research suggests that in the longer term, having a patient base of investors who understand and believe in its strategy can be a competitive advantage for a company. Such a stable foundation allows executives to focus on longer-term strategic goals rather than meeting the short-term metrics often dictated by Wall Street analysts, said Cunningham of George Washington University Law School.

Take Amazon. The share price continued to rise over the years, despite the tight and unpredictable profits and widespread skepticism of Wall Street. The individual shareholders who held Amazon stock bought into founder Jeff Bezos’ vision and saw no problem with Amazon recycling its enormous cash flows back into the company instead of paying dividends. Many of these shareholders are happy now; Someone who bought Amazon shares worth $ 1,000 in early 2000 would be sitting on about $ 40,000 today.

Tesla’s shares have also exploded in recent years – a victory for the base of cult followers who believed in the company’s prospects despite years of losses. In the past five years, Tesla shares have soared more than 1,300 percent, creating $ 640 billion in market value.

While some companies track the loyalty of small shareholders, others track their money. Several companies, whose shares rose during the January meme stock boom, have seized the demand for new shares and turned the trading craze into real cash for the company. (Previously issued shares that are bought and sold in the open market do not generate new money for the companies themselves.)

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