Game over for GameStop's wild Wall Street ride?
What a difference a week has made for video game retailer GameStop, which soared on Wall Street in January only to plummet some 70 percent since Monday.
Feb 3, 2021
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Business
What a difference a week has made for video game retailer GameStop, which soared on Wall Street in January only to plummet some 70 percent since Monday.
Feb 3, 2021
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Business
Tech billionaire Elon Musk said Tuesday he was taking a break from Twitter "for a while", after his posts on the platform helped fuel a stock market frenzy that sent the share prices of several companies soaring.
Feb 2, 2021
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Business
In the past few days, the financial world has been buzzing about GameStop, Reddit, and a short squeeze. Finance Professor, Carlos Slawson, offers some insight into the recent frenzy in the stock market.
Feb 1, 2021
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Business
Chinese smartphone maker Xiaomi said Sunday it had filed a lawsuit seeking to overturn the former Trump administration's last-minute blacklisting of the electronics giant.
Jan 31, 2021
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Business
The computer chipmaker Intel Corp. on Friday blamed an internal error for a data leak that prompted it to release a quarterly earnings report early. It said its corporate network was not compromised.
Jan 23, 2021
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Business
Home-sharing giant Airbnb was set for its Wall Street debut Thursday with a whopping $47 billion valuation amid a feverish rush for new shares in companies adapting to lifestyle changes imposed by the coronavirus pandemic.
Dec 10, 2020
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Business
Companies including the Chinese arm of TripAdvisor Inc. have been ordered by regulators to overhaul their mobile phone apps in what the Chinese government said is a crackdown on pornography and other improper content.
Dec 9, 2020
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Business
Twilio has emerged as a technological backbone for thousands of companies during the pandemic. Its users rely on its digital tools to connect with customers through mobile apps, call centers and messaging services as the ...
Dec 7, 2020
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Business
Chinese internet giant Tencent said Thursday its revenue climbed 29 percent in the third quarter of this year, spurred by gaming and advertising as coronavirus lockdowns keep users indoors and online.
Nov 12, 2020
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Business
Five technology giants reported strong earnings but mixed outlooks Thursday, a sign of varying fortunes as they work to rebound from a pandemic-related economic slowdown earlier this year.
Oct 29, 2020
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A share price is the price of a single share of a number of saleable stocks of the company. Once the stock is purchased, the owner becomes a shareholder of the company that issued the share. The price is calculated by dividing the market capitalization by the total number of shares outstanding.
When viewed over long periods, the share price is directly related to the earnings and dividends of the firm. Over short periods, especially for younger or smaller firms, the relationship between share price and dividends can be quite unmatched.
In the US, a share must be priced at $1 or more to be covered by NASDAQ. If the share price falls below that level the stock is "delisted", and becomes an OTC (over the counter stock). A stock must have a price of $1 or more for 10 consecutive trading days during each month to remain listed.
Many US based companies seek to keep their share price (also called stock price) low, partly based on "round lot" trading (multiples of 100 shares). A corporation can adjust its stock price by a stock split, substituting a quantity of shares at one price for a different number of shares at an adjusted price where the value of shares x price remains equivalent. (For example 500 shares at $32 may become 1000 shares at $16.) Many major firms like to keep their price in the $25 to $75 price range.
In economics and financial theory, analysts use random walk techniques to model behavior of asset prices, in particular share prices on stock markets, currency exchange rates and commodity prices. This practice has its basis in the presumption that investors act rationally and without bias, and that at any moment they estimate the value of an asset based on future expectations. Under these conditions, all existing information affects the price, which changes only when new information comes out. By definition, new information appears randomly and influences the asset price randomly.
Empirical studies have demonstrated that prices do not completely follow random walks. Low serial correlations (around 0.05) exist in the short term, and slightly stronger correlations over the longer term. Their sign and the strength depend on a variety of factors.
Researchers have found that some of the biggest price deviations from random walks result from seasonal and temporal patterns. In particular, returns in January significantly exceed those in other months (January effect) and on Mondays stock prices go down more than on any other day. Observers have noted these effects in many different markets for more than half a century, but without succeeding in giving a completely satisfactory explanation for their persistence.
Technical analysis uses most of the anomalies to extract information on future price movements from historical data. But some economists, for example Eugene Fama, argue that most of these patterns occur accidentally, rather than as a result of irrational or inefficient behavior of investors: the huge amount of data available to researchers for analysis allegedly causes the fluctuations.
Another school of thought, behavioral finance, attributes non-randomness to investors' cognitive and emotional biases. This can be contrasted with Fundamental analysis.
This text uses material from Wikipedia, licensed under CC BY-SA