DRS Your GME

If the company is publicly traded and has shareholders, then it doesn't have enough money to support itself. When you're buying a share in the company, what you're effectively doing is giving such company a loan. And you expect your money back. Plus interest.

Let's imagine a very simplified example. Company X plans to produce goods valued at $1,000 and they need $990 to produce them (that uncludes all the operational costs like materials, wages, taxes, marketing, etc). They aim for 1% profit margin ($10) at the end of they year. The problem? X management only has $900 in cash. So how can they achieve their goal? One option would be to fire some people, produce less goods and earn less money. Another option would be to seek investment for $90.

Again, this is a very simplified example. So, they go public and create shares which they value at $90. You go and them. Everything looks great, right?

Now the year passes. Balance at the start was $900 + $90 = $990. Then they spend $990 on manufacturing and their balance became $990 - $990 = $0.

X had a great year, they sold everything, there were no issues, happy days! So, $0 + $1,000 = $1,000. But you ask for your loaned money back. So, $1,000 - $90 = $900. And they can't produce $1,000 worth of goods next year, because they lack your $90.

What X needs to do is to either increase their profit margin in some way to cover your loan or find a way not to give your money back to you. In short, they are either now permanent slaves to shareholders or they need HUGE profit margin, which is not always possible. And when you start factoring in taxes, inflation, reserve funds, etc, company liability just grows sky high.

The reality is that running a business is very hard. US has tens of millions of registered companies and corporations. But you only hear about a few rich outliers in the news. Because majority of them are barely surviving.

If they lose the shareholders? That only means shareholders are seeking their shares, they go to another shareholder or are getting bought back by the company... If everyone is selling then the share price is driven down (too much offer) and the company might end up getting delisted from major exchanges, it doesn't mean they don't make a good product or whatever, but if everyone is jumping ship then there usually is a reason for it...

The company makes profit from shareholders only when it's their own shares that they're selling or when new shares are being bought, so initial offering, subsequent offerings (increasing the total number of shares that exist, current shareholders might not appreciate it). Going back to being private after finding success (buying back all the shares on the market) is usually so expensive that it's not something the company will consider doing, especially at that means depending on private investments to raise capital instead of being able to simply sell shares owned by the company or emit more shares.