The author posted a question in Business, Finance
What is the effect of a drop in the market price of a company's common stock? and got a better answer
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Response from 0[+++++]
Falling stock price leads to a decrease in the rating and an increase in the number of offers.
Falling stock price leads to a decrease in the rating and an increase in the number of offers.
Response from 0[+++++]
On the decrease in the value of the assets of the company itself the value of the company itself. When a share is worth 1 ruble with a million shares the value of the company is 1 million. And when a share is worth 50 kopecks and you have the same million shares, the value of the company is already half that. This is a very generalized answer, but for your understanding of the essence. Not to mention the loss of shareholders, who bought a stock for 1 ruble and can sell it for 50 kopecks, and who will receive less profit from the stock if the company is falling in price.
On the decrease in the value of the assets of the company itself the value of the company itself. When a share is worth 1 ruble with a million shares the value of the company is 1 million. And when a share is worth 50 kopecks and you have the same million shares, the value of the company is already half that. This is a very generalized answer, but for your understanding of the essence. Not to mention the loss of shareholders, who bought a stock for 1 ruble and can sell it for 50 kopecks, and who will receive less profit from the stock if the company is falling in price.
Response from 0[+++++]
The mood of the owners of shares. If the shares are pledged or leveraged, the owners may be required to add funds to cover the loan, and if they refuse, they may be forced to sell your shares. It also affects the movement on the Forbes ranking of the richest people in the world. And, of course, a lot of people want to buy shares on the cheap. There are a lot of other possible influences. For example the influence on the front pages of newspapers and Internet sites, which would start to talk about it and look for the real and imaginary reasons of the fall.
The mood of the owners of shares. If the shares are pledged or leveraged, the owners may be required to add funds to cover the loan, and if they refuse, they may be forced to sell your shares. It also affects the movement on the Forbes ranking of the richest people in the world. And, of course, a lot of people want to buy shares on the cheap. There are a lot of other possible influences. For example the influence on the front pages of newspapers and Internet sites, which would start to talk about it and look for the real and imaginary reasons of the fall.