Question

Imagine that you own 200 shares of stock in Delta and plan to sell it today...

Imagine that you own 200 shares of stock in Delta and plan to sell it today in the secondary market. If Delta will receive no direct cash flow due to your sale, why would their management care about the price you get for your shares?

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Answer #1

Delta shall care about the price you get for your shares because this will indicate the value of their company as stock is a part of the company. IF you get a good price for your stock, the company shall be assured that the investors in market place a good value on operations of the company and are willing to pay a high price for the stock.

Also your transaction shall place the value of stock for valuation of the company. Your transaction price shall be the benchamark price for some time and if valuation takes place at that time, then your transaction price shall be considered as the market value of the stock.

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