Factors that influence shares price in stock market

forlan By forlan, 9th Mar 2012 | Follow this author | RSS Feed
Posted in Wikinut>Business>Investment

Some factor that influence the stock market is the demand or the supply. When the demand high but the supply constant, the stock price will increase.

Factor That Influences Stock Price

We have heard Microsoft tried to acquire Yahoo years ago. The rumor has made Yahoo share risen to $ 30. Microsoft had offering $ 31 for a Yahoo share (stock). This offer was better than market value stock that day. This situation made Yahoo stockholder happy, they could sell their stock with best price. The stockholder will get profit from higher stock price. Microsoft has desire to expand their search engine business and they want to become the King of Search Engine. A few months ago, they had opened bing.com for expanding market.
Why Yahoo stock price can raise? On the other hand, maybe someday Yahoo stock will turn down. Economic sciences can explain this phenomenon easily. Ceteris paribus, high demand makes the price of a commodity rise up. People want to buy the stock but the supply is insufficient. They want to pay more for the things. Stock price may rise or down because of supply-demand force. If the demand increase and the supply remain unchanged, stock price will rise. If, on the other hand, the demand decrease and the supply remain unchanged, stock will decrease.
When Microsoft try to acquisition Yahoo, Investor suddenly look for Yahoo stock so that the demand high. Automatically, Yahoo price will rise. Why investors interesting find Yahoo Stock? Investor believes that Yahoo stock will rise to $ 40 after Microsoft success to acquisition Yahoo.
Story of Microsoft acquisition plan above show us that good news will pull investor to buy that stock. Other information public that may raise stock price is dividend announcement. Every dividend announcement almost can be sure the stock price will rise.
Every year public company has obligation to report their financial company report to public. Investor may interest to buy the stock of company that has good performance. Good company depict with it earning. It can grow their earning year to year.
Conversely, bad company does not give good signal to investor. Investor may rethink to invest in bad stock. They sell their stock as soon as possible. They do not want suffer financial loss over many times. Supply side on bad stock will increase because there is a little or no one buys it. Stock price will go down soon.
We may conclude that demand and supply influence share price. Demand and supply force is dependent by some factors. Both demand and supply affected by information, news, and rumor. Investor should notice any information about a company. Sometimes, investor must careful that provided information in public is not always true. Wrong information may astray investor. For example, Company XYZ announced that reached profit over two times last month. Now, company XYZ bankrupt because they cannot pay the debt. Company XYZ must manipulate their financial report.


Microsoft, Share Investment, Stock Investment, Stock Market, Yahoo

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author avatar forlan
A financial consultant and blogger. I love pets too.

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