Robinhood's growth in the summer slowed as trading calmed
The meteoric growth of Robinhood Markets is coming back to earth, much like its stock price.
Oct 26, 2021
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Business
The meteoric growth of Robinhood Markets is coming back to earth, much like its stock price.
Oct 26, 2021
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Other
China is banning children from playing online games for more than three hours a week, the harshest restriction so far on the game industry as Chinese regulators continue cracking down on the technology sector.
Aug 30, 2021
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Business
Zoom, the videoconferencing company whose growth was supercharged by the pandemic over the past year, will buy the cloud call center company Five9 in an all-stock deal valued at about $14.7 billion.
Jul 19, 2021
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Business
Netflix has hired veteran video game executive Mike Verdu, signaling the video streaming service is poised to expand into another fertile field of entertainment.
Jul 15, 2021
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Business
China's internet watchdog said Friday that it has launched an investigation into ride-hailing company Didi Global Inc. to protect national security and public interest, days after the company went public in New York.
Jul 2, 2021
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Business
Spotify posted on Wednesdaya rare net profit in the first quarter and a sharp increase in paid subscribers as the music streaming giant launched in dozens of new markets, but disappointing total users sent shares tumbling.
Apr 28, 2021
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Business
If a stock market can be viewed as the nervous system of a nation's economy, then few things can agitate that system's nerves the way a stock bubble can. The recent roller-coaster adventures of the GameStop stock price are ...
Mar 17, 2021
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Business
Zoom's astronomical growth is tapering off along with the pandemic, raising questions about whether the videoconferencing service's immense popularity will fade as more people return to classrooms, offices and other places ...
Mar 2, 2021
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Business
For a minute there, it looked like Ronny Maali had struck it rich—relatively speaking.
Feb 4, 2021
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Business
Even after stepping aside as CEO, Amazon founder Jeff Bezos will likely keep identifying new frontiers for the world's dominant e-commerce company. His successor, meanwhile, gets to deal with escalating efforts to curtail ...
Feb 3, 2021
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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