Factors affecting the share prices

Hello Smart Investor! If you are new to EquiTipz, you might want to Subscribe to our Email Updates or RSS feed for updates on this topic.

Introduction

In this article I will be writing about the few factors which affects the share prices moves up and down. I spoke to many investors, one thing I understood that most of them are investing on companies without having the fundamental knowledge on the stocks. They just want their money to be doubled with in one year. This article just writes down few suggestions to before start investing in the shares.

Company Specific News

If there is a good news about the company which directly affecting the company, the prices may increase. For example, xyz company enters into a new business where there is less competition, the share prices will increase with the expectation of more profit for the company in future.

In the last week, Bharti Airtel announced that it will acquire the Kuwait based Zain telecom for $10.6 billion. The share prices were declined more than 10% because investors felt the company is over valued and it may affect the Bharti’s profitability.

Investor has to keep close eye on the market and utilize the golden opportunities.

Quarterly Earnings

We know that every quarter company will announce the results of that particular. If the earnings are more than the prediction, price will increase otherwise will decrease.

Fresh Issue Of Shares

If a company is issuing the fresh shares, then share prices will come down because the profit will be shared with more investors then before.

BuyBack

This is when the company buys back its own shares. As the number of shares decline, the company’s earnings will be distributed to fewer investors. As every investor is entitled to a larger share of company’s future earnings, its share price increases.

Summary

I hope this article will be useful for the new investors. It is only the very basic ideas about the share price changes. There are many numbers of factors affecting price changes. I will be writing it on my future articles. Thank you for reading this article!!

[Editor's Note: This post is submitted by our Guest Blogger Krishna Srinivasan. Krishna is the founder of Thin - Plan - Invest. If you also want to write for EquiTipz, please check this. Stay tuned for our Revenue Sharing Program to be announced.]