Ep. 409: Why Does A Company Care About Its Stock Price?

We want to answer your questions about money. Email us and you may hear yours on the air: askpete@petetheplanner.com

This week on the Pete the Planner Show, Pete confesses he doesn’t want to get the test to find if he and Damian are actually related or not!

Remember: In the first six months of 2021, we’re going to make over five families’ financial lives, LIVE on the air! WE’RE GIVING AWAY FIVE FREE HEY MONEY, MEMBERSHIPS to walk with them across six months telling their stories about their struggles in personal finances. Check us out!

No time to listen?  Here’s a preview of what happened and when:

Show Notes:

HEADLINE SEGMENT: [4:15]

  • “Amazon’s stock price went up. The company doesn’t directly benefit, nor is it directly impacted from that price movement. An indirect benefit to stock price going up is that it looks like the company has financial strength.”

    • Damian: Gamestop struck while the iron was hot and issued more shares people could buy. They capitalized on the wave for a fresh infusion of cash.
    • Pete: There’s a difference between the company caring about the stock price and the individuals within the company caring about the stock price.
    • Many individuals’ benefits include stock options. That means when the stock price goes up, the value of the equity they have access to increases.
    • In publicly traded company, hostile takeovers are a very real possibility.
    • Damian: Low stock price presents some big issues for a company, internally and externally.


MAILBAG QUESTION 1: [13:22]

  • “I’m 63 in August and still working. I have the better medical insurance and plan to work until December of this year or a few months into next year. My husband is 63 1/2, and we always aimed at retiring at 63 and the advisor ran the numbers to make sure our money would last; so far so good. We’ll have money til age 93. We have about $1.5M in join 401(k)s, $60K in mutual funds and $10K in an emergency fund. We’re knocking off debt. Husband owns his car, I’m leasing. We’ll both get SS and annuity payments. We sold our home in NJ, currently renting until we move to SC and will have a mortgage. We have about $85K from the sale of the home in NJ and will likely use that for downpayment in SC. What are your thoughts on renting vs owning when we get to SC? Are there tax advantages aside from having an asset to pass down to our daughters?”
    • Pete: They’ve done a lot of things right.
    • Damian: There is no rush to buy. Especially not in this market. There’s no reason to tie yourself down in an unfamiliar new state.

There’s so much to explore in the mailbag question. Don’t miss the entire conversation for the best gems. There might be something you can think about in your own situation.  — click PLAY below for the full show.


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