system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: Does a company care about whether it's stock price is high or low?
gpt
Yes, for many reasons.

I'll assume that by "company" you actually mean the executive leadership and board members. A random employee may care indirectly (if the stock price is really low they might get laid off) but the stock price has very little direct effect on them.

The board and CXOs are typically compensated mostly in stock. So for them an increase in stock prices directly translates into extra money for them. For example, every time the price of Activision Blizard goes up by $1 Bobby Kotick's net worth goes up by $4million.

Companies may also need to raise additional financing. Sometimes this is in the form of a "secondary equity offering". Sometimes it's through debt. The stock price matters for both of them.

For the first it's pretty obvious. During an IPO a company typically only sell some of the shares. If they need more money they can later sell more shares. The higher the stock price the more they can get for those shares.

When companies try to take on debt the debtors try to figure out how likely they are to get their money back. If the company has great credit and they're almost guaranteed to pay everything back on time (AAA), they can get a good interest rate. If the company is likely to default creditors will demand compensation for that risk in the form of increased interest.

A major factor in estimating the default probability is to look at what percentage of the companies total assets would be needed to cover the debts. That is, if a company has trouble repaying debt, they can sell stock. The lower the stock price the more they need to sell to cover the debt. If the price gets too low they can't pay their debts even if they sold the entire company.

In addition to a low price making it more expensive to borrow money it can also trigger "debt covenants". Most loans have clauses that will force automatic asset sales if the stock price gets below a certain level.