The corporate factors that affect stock price volatility are as follows:
1. Ex-rights and ex-dividends
After a listed company distributes dividends in cash or in bonus shares , the stock price is prone to fluctuations. After ex-rights and ex-dividends of listed companies, the stock prices are relatively low, which is easy to stimulate investors to buy .
2. Capital increase and allotment
Listed companies issue new shares to increase capital due to business needs . After the issuance of new shares, the number of shares of the listed company increases, which reduces the net value of each share and thus causes the stock price to fall. However, for some blue- chip stocks of listed companies with good performance and good financial conditions, the stock price will not only not fall after the capital increase, but will rise, because the listed company will enhance the company’s operating ability and profitability after the capital increase, which will allow shareholders to obtain More return on investment.
3. Capital reduction
When a company announces a capital reduction, that is, a reduction in capital, the total capital of the listed company will also decrease. This is mainly due to the strategic needs of the company’s business development, or due to the company’s poor management, which has suffered losses year after year, and the listed company needs to be reorganized. A capital reduction by a company can cause the stock price to fluctuate significantly.
4. Stock split
In order to make the stock more attractive, listed companies often subdivide larger denomination stocks into smaller denomination stocks. The stock split does not affect the capital of the listed company, it only increases the total share capital, but the par value of each share of the stock is split. After the stock split, the net output value per share represented by each stock will also decrease, which will make the stock price fall, which is beneficial for investors to subscribe .
What does stock price volatility mean?
Stock price volatility refers to the changing pattern of stock prices, which is manifested as a volatile state in which there is an opposite small trend movement in a major trend. There are three main trends in the stock price fluctuation state: uptrend fluctuation, downtrend fluctuation and no trend fluctuation.