When a company's shares are publicly listed share price charts are one of the first things people want
to see.
Why.
Because this is probably the quickest way to understand how the company's doing if its current price
is high and has been increasing for a while.
This means the firm's been doing well and the market sees that and therefore prices its shares higher.
Conversely if its share price has been decreasing the market has captured a sign of weakness and values
the company at a lower price.
This may not be the case all the time but these charts are still informative as share prices react to
material news think for example of a regulatory approval announcement for a new drug developed by a
pharmaceutical company.
Such news would cause the company's share price to jump.
On the flip side imagine a bank just imposed a huge fine in the billions of dollars by a regulator for
some compliance breach or that news has broken out about a rogue trader at a bank who made a fraudulent
bet on the market and lost a fortune.
Such news would cause the bank's share price to tank the list of potential price movers is long and
can be any event expected to affect the prospects and value of a company with any certainty share price
movements can be irrational or exaggerated as the stock market is volatile and market participants can
be emotional and impatient.
Obviously it's a must to include a share price chart slide in the presentation.
Applying these slides can be a useful barometer for any companies stakeholder.
Anyone interested in the company including investors lenders management employees partners competitors
regulators and so on share price slides are often used in pitch books.
Extended company profiles and other company presentation materials.
OK let's wrap it up here.
The next lesson will be all about the share price chart content.
In other words what to put into a share price chart slide.
Get excited and we'll see you there.