For questions relating to the valuation of stocks, based on fundamental analysis, market conditions, etc.
Questions tagged [stock-valuation]
371 questions
254
votes
22 answers
If a stock doesn't pay dividends, then why is the stock worth anything?
I read somewhere that companies are not required to pay dividends to shareholders (this is correct, yes?).
If so, then if company A never pays dividends to its shareholders, then what is the point of owning company A's stock? Surely the right to…
extremeaxe5
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220
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13 answers
Why would a company care about the price of its own shares in the stock market?
After a company has issued shares, why should it care if the value of the shares fluctuate?
Since the shares are now publicly traded, if the value fluctuates, that is strictly a transaction between buyer and seller, none of whom are directly related…
Victor123
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102
votes
6 answers
Can someone explain the GME short squeeze situation to a non-stock trader?
GameStop Corp. (GME) stock is over $300 at the time of this post. I understand the 10,000 foot view of the story only: That some Reddit folks are buying up shares to squeeze a short seller.
But I don't understand how this works. Why buy shares?…
Paul
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71
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4 answers
How does a public company issue new shares without diluting the value held by existing shareholders?
When a public company issues new shares, the total number of shares traded in a secondary market goes up. Assuming there is no change in the fundamentals of the company and the profitability, I would expect that the share price of the existing…
Mozan Sykol
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50
votes
9 answers
If stock price drops by the amount of dividend paid, what is the use of a dividend
I have heard that some people buy stocks based on how much dividend they pay, because dividend is considered 'income'. But if I buy a stock for 100$ and it pays a $1 dividend, the stock would also drop by $1. So really, is there any benefit to the…
Victor123
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42
votes
13 answers
One of my stocks dropped 40% in 2 days, how should I mentally approach this?
Right after the event, I felt shocked and depressed. I've been engaging in stocks for about a year now but I've never encountered such a big jump in such a short time. What I'm planning to do is just wait for it to rise again, which I'm not sure…
Zaenille
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31
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2 answers
Is my stock gone forever from a reverse split / bought by another company?
I'm a complete novice in regards to investing and had purchased some shares of OXIS from TD Ameritrade back in March of 2015 (NASDAQ). The company (OXIS International) became very devalued and did a "mandatory reverse split" and changed symbol to…
Joe
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24
votes
8 answers
Why can more jobs mean more inflation and decreased stock prices? What are other links in the chain to watch out for?
Many news outlets, such as this one (there are many examples), are reporting that the current US stock sell-off is due to a stronger-than-expected jobs report in January and fears of inflation and rising interest rates.
I don't follow the logic, so…
NeutronStar
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23
votes
3 answers
How are startup shares worth more than the total investment funding?
How does Mark Zuckerberg earn his money from Facebook? He is worth $17.5 billion now, but the total funding for Facebook is only $2.4 billion? I don't understand this. Is this the money Facebook makes through advertising revenues, or from when they…
harvardfail
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18
votes
5 answers
Why is AT&T's stock price declining, during the days that they announced the acquisition of Time Warner inc.?
Why does the stock price decline when a seemingly promising acquisition is announced & agreed on?
Leo
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18
votes
5 answers
Historical stock prices: Where to find free / low cost data for offline analysis?
I am looking for a free way to get a large amount of data on the prices of stocks. I am not a trader or anything like that so it wouldn't be worth it to pay for a service to give me stock prices. I have a mathematics background and I would like to…
Henry B.
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17
votes
2 answers
Shorting a stock after dividend
Theoretically, the price of a stock should always fall whenever a dividend is paid out to shareholders. Is this true in practice? If it is, I can just short the stock before the dividend is paid and get sure profits?
chrislam5459
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17
votes
6 answers
How to evaluate stocks? e.g. Whether some stock is cheap or expensive?
What kind of information do you obtain before buying (or selling) a stock? I know the PE ratio is very important, but not the only thing. Are there any rules of thumb to determine whether some stock is cheap or expensive? Or do you simply listen to…
GUI Junkie
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17
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12 answers
What would be reasons NOT to invest in a small company that has great leadership, talented workers and an amazing product?
For example Apple, Amazon, Microsoft all fulfilled these checkmarks when they were small companies. People who had invested in them during the phase where they were no longer obscure, (but still smallish companies) would still have made anywhere…
Eric Gumba
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16
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7 answers
How can a company trade at a market cap below its cash on hand?
My question is general, but prompted by the current stock price of NASDAQ:CRTO (https://www.google.com/search?q=crto&tbm=fin). The company is currently trading at a market cap of less than 400M$
but the last earnings report shows 418.76M$ "cash on…
Zonko
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