Stock market/ corporate indicators
Secondary offerings
A secondary offering or distribution is the sale of a block of stock to the public by an existing stock holders. The sale of a secondary is handled off the exchange floor by under writers. The offering price is fixed but is usually near the current market price of the stock. In most cases, the offering is too large tone efficiently handled in the normal course of everyday trading of the stock on the exchange floor.
A secondary is generally considered bearish for a stock. There are two principal reason for this. First, the sale of the shares by large stock holders who often in unique position to know of the internal affairs of the company bespeaks little for the company's prospects.
Second, the offering in effect to the supply of stock in the marketplace and at the same time absorb investment funds which might otherwise be used to bid for the existing supplies. The potential buying power available to bid for the publicly held stock in thus diminished, and this diminution of demand, along with the coincident increase in public supply, is likely to have the effect of sending the market price lower.
A large number of secondaries is bearish for the market because it signifies a lack of confidence in future economic prospects by large share holders in many companies, and because it adversely alters the market supply- demand relationship.
A below average number of secondaries is bullish for it not only can notes confidence by large shareholders unwilling to part with their stock, But also reduces the relative supply of shares.
New stock offering
New corporate offerings of common stock to the public, it's called IPO. Companies sell stock to the public primarily when they need capital for expansion and related purposes. This usually occurs when business prospects are bright and when companies view their stock s as generously priced by the market.
New stock offering soar when stock prices are riding a new wave of enthusiasm and when the market will be most receptive. As the conditions for this most naturally exist near major cyclical tops, a high volume of offering is bearish. The new source of supply introduced into the market's supply -demand equation also has the effect of diverting investment funds away from other stocks, this exerting downward pressure on price.
As the nations economy has grown, the volume of new stock offering has expanded along with it, resulting in a long term uptrend within the series.
Stock split
A secondary offering or distribution is the sale of a block of stock to the public by an existing stock holders. The sale of a secondary is handled off the exchange floor by under writers. The offering price is fixed but is usually near the current market price of the stock. In most cases, the offering is too large tone efficiently handled in the normal course of everyday trading of the stock on the exchange floor.
A secondary is generally considered bearish for a stock. There are two principal reason for this. First, the sale of the shares by large stock holders who often in unique position to know of the internal affairs of the company bespeaks little for the company's prospects.
Second, the offering in effect to the supply of stock in the marketplace and at the same time absorb investment funds which might otherwise be used to bid for the existing supplies. The potential buying power available to bid for the publicly held stock in thus diminished, and this diminution of demand, along with the coincident increase in public supply, is likely to have the effect of sending the market price lower.
A large number of secondaries is bearish for the market because it signifies a lack of confidence in future economic prospects by large share holders in many companies, and because it adversely alters the market supply- demand relationship.
A below average number of secondaries is bullish for it not only can notes confidence by large shareholders unwilling to part with their stock, But also reduces the relative supply of shares.
New stock offering
New corporate offerings of common stock to the public, it's called IPO. Companies sell stock to the public primarily when they need capital for expansion and related purposes. This usually occurs when business prospects are bright and when companies view their stock s as generously priced by the market.
New stock offering soar when stock prices are riding a new wave of enthusiasm and when the market will be most receptive. As the conditions for this most naturally exist near major cyclical tops, a high volume of offering is bearish. The new source of supply introduced into the market's supply -demand equation also has the effect of diverting investment funds away from other stocks, this exerting downward pressure on price.
As the nations economy has grown, the volume of new stock offering has expanded along with it, resulting in a long term uptrend within the series.
Stock split
- The number of companies declaring stock splits is another interesting and novel indicator of speculation. Corporate is considering as a stock price is over valued. The analysis have proven that price behavior of common stocks following declaration of stock split does not deviate significantly from the average return of all other stocks.
Companies normally use stock split s as a means of decreasing the price of their common stock to a level which makes purchase of it easier for smaller investors. A high price is a natural precondition and by definition, stock prices are higher around market peaks than they are near bottom.
At cyclical troughs, the market's own action has lowered the price of common stocks and no artificial action need be taken by company management to bring prices down to more purchasable level. The declaration of a stock distribution often precedes the split itself by several weeks. To maximize the effects of lags at market turning point.
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