Share Prices, Definition, Explanation and Analysis

 Share Prices, Definition, Explanation and Analysis 

Definition

"The amount that is needed to acquire a share in a firm is a share price, or a stock price. The share price is not set but varies in line with the market conditions. It is likely to grow if the firm is well viewed or falls if it does not achieve its expectations."

Detailed Explanation

Share prices are initially decided by the initial public offering (IPO) of a firm in which the price of one share is determined according to the stocks of that company received, and the demand for the same. 

The prices are normally defined by a bookrunner - a lead manager who is expressly nominated for the purpose of determining a suitable IPO price.

A number of variables might influence the share price of a firm after the IPO. Any increase in the number of market shares, would decrease price, provided the demand remained the same. 

In addition, any drop in demand – maybe due to changes in senior management – would lower the stock price, as long as supply stays steady.

Specifically, the company's share price may also be affected by anticipated and unanticipated industry news, macroeconomic reporting and political pronouncements.

Analysis of Share prices

• Share prices may be analyzed successfully by a technical as well as a key analysis. The technical analysis tries to evaluate future share price movements by examining previous data. 
• Technical analysts are frequently able to determine if a stock is likely to enter an impressive or boring trend in examining past price movements.
• Fundamental analysis is to determine if a stock is over or underestimated. This is done by analyzing the perceived capacity of particular companies to make profits, concentrating on macroeconomic data, financial statements and senior management choices.
• A stock price is the single share price of a number of a company's saleable share shares. In plain words, the stock price or the share price is the most sum that someone would pay for the stock, or the lowest amount for which it can be purchased.