sirmikey1
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I'm reading about stock share valuation, that companies pay an Investment Pro to determine IPO (Initial Public Offering) stock price. Afterward, in the secondary market, is it still the company Investment Pro (bookie) which mediates between comany and private share holders to determine the posted suggested share valuation?
Well, just that Wikipedia is not clear on this:
http://en.wikipedia.org/wiki/Stock_valuation
http://en.wikipedia.org/wiki/Share_price
EDIT:
Reading.... looks like Market Capitalization (bookie) sets company suggested share price; and trading adjusts it further; adjusts the exchange's electronic book.
http://www.financialadvisory.com/answer/who-determines-stock-prices/
What factors can adjust this electronic book? Who?
Thanks,
Mikey
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Sat Mar 19, 2011 10:06 am |
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coaster
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In the secondary market, Mikey, it's YOU who determines the price. What you're willing to buy it for, versus if you own it, what you want for it to sell it.
(the first answer right under the question posted at that link)
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Sat Mar 19, 2011 3:47 pm |
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sirmikey1
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Thanks Coaster,
I'm most interested in what's going on with the published stock exchange price; and who/what is influencing/adjusting that number. The last link sounds most obvious, that the major corporation's "electronic book" is there on the exchange and being influenced by:
1. Market Cap # (corp bookie figures)
2. Share Activity
3. Market/field, Local, State, Federal, and Global activity + statistics.
Is this true, or is it the corporate bookie constantly doing the accounting/adjusting?
1. Market Cap # (corp bookie figures)
2. Share Activity
3. Market/field, Local, State, Federal, and Global activity + statistics.
Which is it?
Thanks,
Mikey
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Sun Mar 20, 2011 5:57 am |
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coaster
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None of the above, Mikey.
Market cap is shares outstanding times market price.
Market price is the price of the last executed trade.
Published exchange price is the "closing price" which (in loose definition) is the last market price of the trading session during regular session hours.
Share activity is how many shares traded.
The electronic book is simply all of the above done electronically.
There is no corporate bookie.
As far as manipulation, you might say that every market participant exchanges in manipulation: the buyer wants to buy at a lower price, and the seller wants to sell at a higher price.
As far as government statistics, whoever believes that they represent reality had better get a reality check.
The real reality is what happens in the market every day: people voting with their money on the worth of the companies that they want to own a piece of (or not). Left alone with enough regulation and oversight to prevent and detect abuse, but not too much regulation to stifle the expression of the above, it works just fine.
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Sun Mar 20, 2011 6:50 am |
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sirmikey1
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Coaster,
Are you saying that posted price fluctuations are always (strictly) a reflection of price of last shares traded?
Thanks Again,
Mikey
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Sun Mar 20, 2011 7:57 am |
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coaster
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"Always" is a word I "always" shy away from, but with respect to shares listed on the major exchanges, the answer is "yes", with the caveat that in some situations, like the recent "flash crash", some outlier trades that are obviously irregular are reversed and taken out of the posted price data. This is a safety mechanism to ensure that errors such as selling 1,000,000 shares instead of 1,000 shares don't affect prices. After all, if it was a mistake, then the result of that mistake doesn't represent the true reality of the supply v. demand on that particular stock.
Shares that are sold "Over-the-Counter" or are delisted or in bankruptcy or even "penny stocks" or some other situation that affects trading, then I can't use the word "always".
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Sun Mar 20, 2011 4:54 pm |
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sirmikey1
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Thanks for clearing this up for me.
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Sun Mar 20, 2011 6:35 pm |
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sirmikey1
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Coaster,
This video explains the real story behind the fat thumb market crash;
http://www.youtube.com/watch?v=7VQf-SPfBx0
Mikey
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Sun Mar 20, 2011 9:20 pm |
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coaster
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Interesting.
Funny. The "Flash Crash" happened May of 2010.
I wrote about the dangers of flash trading in Sep 2009, more than a half-year before. And it's in black and white (well, dark blue and light yellow, actually) and posted here:
http://www.billsebastianforum.com/viewtopic.php?f=30&t=411
And I'm not on any TV shows, radio shows, or YouTube videos. Why? Because it's not Rocket Science. The Talking Heads and their guests don't know everything. You just have to keep your eyes and ears open, NOT to listen to the TH's and the YT's, but to pay attention to the details, connect the dots, and come up with your OWN market intelligence. When it comes down to it, they don't know any more than you or I do.
So, don't believe everything you see and hear. Look at the dots, take out the ones that don't make sense or connect to the other dots, and come up with your own picture. Like as not, you'll be more in the ballpark than they are.
And when it comes down to it: what effect did the Flash Crash have when all was said and done and it's a year later? Nada. Absolutely Nada.
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Mon Mar 21, 2011 5:08 am |
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sirmikey1
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Related Video..
Long before the meltdown, one woman tried to
warn about a threat to the financial system.
FRONTLINE The Warning
http://video.pbs.org/video/1302794657/
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Mon Mar 21, 2011 6:13 am |
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coaster
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Ya, Brooksley Born. Smart lady. Probably why she's not in government any more. I remember reading about her at the time.
Now that's one of those dots you can keep. Look for more and starting connecting the ones that make sense. Just keep in mind that no one dot is the whole picture, and that the more dots you have, the clearer the picture becomes.
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Mon Mar 21, 2011 6:47 am |
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sirmikey1
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Sure, info overload, a million excuses. What's your take on it, if you don't mind?
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Mon Mar 21, 2011 7:41 am |
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coaster
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Not sure I get the question. My take on a million excuses? I pay no attention to them. Other than it's noise to filter out.
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Mon Mar 21, 2011 2:58 pm |
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