Countless factors affect the share price of a company's stock. Some of these fall directly under the company’s control or reflect the perception of the strength of the business itself. Other times, a share price can be buffeted by external events that the company has no possibility of influencing. Stock prices are affected by many factors that can cause the value of the stock to rise or fall. The fluctuation in stock prices ultimately affects the buying and selling of stocks. There are some of the factors that I have gathered:
1. Financial Metrics/ Company Earnings - Internal Factors
2. Company Management- Internal Factors
3. Economic and Political trends - External Factors
4. Regulation and Competition - External Factors
5. Belief in the Business - Internal/External Factors
6. Market Sentiment - External Factors
7. News - External Factors
8. Industry Condition - External Factor
9. Company Mergers, takeover and Dividends - Internal Factors
10. Investors Action - Internal/External Factor
Shareholders look to a company’s financials as an indicator of what the business is worth. Corporate earnings and the ability to exceed Wall Street expectations can move shares in a positive direction. When earnings are passed back to investors in the form of dividends, this also can boost share prices. Unexpected losses or a failure to reach revenue or profit targets can lower value.
Part of shareholder value comes from investor confidence in management. If investors are impressed with the quality of the company’s decision-makers and the overall strategic direction, they’ll likely be more optimistic about the company’s direction going forward and bid up the share price. An untested management team or a senior leadership group that didn’t succeed elsewhere can have the opposite effect, even if the current financial numbers aren't bad.
Economic and Political Trends
Businesses can’t control larger economic and political...