101538030-1
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$Amazon (AMZN.US)$ Strong.
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101538030-1
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By Melody
A company's most important goal is to make money and keep it. When a company no longer has the ability to keep making money, its share price will drop significantly.
Does this mean we can only buy into companies with positive net income?
NO.
$Tesla (TSLA.US)$would be a perfect example. Tesla was listed in 2009, but the company didn't break even till 2020. Not having a positive net income did not stop Tesla shares from skyrocketing. This is because the share price does not simply reflect a company's net income, but rather its profitability.
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A company's most important goal is to make money and keep it. When a company no longer has the ability to keep making money, its share price will drop significantly.
Does this mean we can only buy into companies with positive net income?
NO.
$Tesla (TSLA.US)$would be a perfect example. Tesla was listed in 2009, but the company didn't break even till 2020. Not having a positive net income did not stop Tesla shares from skyrocketing. This is because the share price does not simply reflect a company's net income, but rather its profitability.
...
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