Why should we take into account the presentation of results of companies on the Stock Market?
It is an exercise of transparency for shareholders or investors, the presentation of results; and an obligation on the part of the stock market regulators.
With this they try to show the evolution of each company and make clear its financial status from time to time. A company can increase its value in a short time or even go into default.
To avoid fraud or discrepancies, regulators, at the slightest indication of inaccuracy, are able to remove stocks from stock exchanges, applying the principle Information Asymmetry.
How do these results affect the Stock Market?
Given the uncertainty of the results, at this time the price of the securities are more volatile, and more abrupt movements tend to occur. Whatever the result, it will condition the next period of activity of the company's shares. We could say that a snapshot of the last months of evolution of the company, will directly affect the economic performance of the shares that are on the market, making their price vary ostensibly.
To take into account, that not only results are presented, but also an estimate of the future prospects of the Company is given, taking into account trends and predictions. If you want to learn to invest in the stock market, you should also be informed of what it does, how it does it and what results a company is having, from a realistic point of view, to be able to read if the shares will rise, fall or remain stable for the next few months.
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