Do publicly-traded companies have an incentive to "promote" their stock to their customers in any way?

Personal Finance & Money Asked by bitmaker on December 21, 2020

For this question I’d like to stick to companies serving mostly regular consumers and not B2B — i.e. Apple, not Boeing. Do companies like these have any incentive to offer something to their shareholders beyond a dividend? For example, a Disney shareholder might receive a free Disney+ subscription or an Apple shareholder might be allowed to pre-order phones a day early. Does the company gain anything by offering this kind of non-financial/non-dividend incentive to encourage the public to invest?

One Answer

In Japan, the average market capitalization of publicly traded companies is smaller than in other developed economies. In order to list on the Tokyo Stock Exchange's 1st section, companies need to have at least 2200 shareholders. This is difficult for the smaller firms. So what do these smaller firms do to attract shareholders? Give them gifts and other perks!

These gifts are called "yutai" gifts (株主優待), and they are fairly common in Japan. Nowadays, these gift-giving practices are not limited to the smaller companies. To read more about the reasons for this gift-giving, and the history of it, you can find research papers about this phenomenon on Google Scholar. Also see: Ramen dividends: Holders of some firms' shares fancy 'yutai' gifts.

Answered by Flux on December 21, 2020

Add your own answers!

Related Questions

Difference between bond rating and issuer rating?

0  Asked on February 23, 2021 by raeo


When exercising a leap call option, do you keep the premium?

3  Asked on February 23, 2021 by irakli-lekishvili


What is the difference between vwapy and vwagy difference

0  Asked on February 22, 2021 by jerzy-szczypien


Bond at 94%. Is it a good idea to buy?

2  Asked on February 22, 2021


How do share dilution scams make money?

1  Asked on February 22, 2021 by michael-a


How to bet against IPOs?

1  Asked on February 21, 2021 by superbest


Ask a Question

Get help from others!

© 2022 All rights reserved. Sites we Love: PCI Database, MenuIva, UKBizDB, Menu Kuliner, Sharing RPP, SolveDir