RE:Securities CommisionAnswer to how stock dropped 20% on only 1.5mil shares traded.20% of float is 37 mil shares.
Sounds like a lot of fluff and great for shorters.
Dear Mr.
Any company’s share price is determined by basic market economics namely, supply and demand in the marketplace. It is driven at least in part by both fundamental and technical analysis and the perception/interpretation of value (or share valuation) by market participants such as investors and speculators, etc. The share’s price is where the transaction clears and the seller and the buyer agree to exchange ownership.
The size of the share float is an exogenous variable to the pricing mechanism. In other words it is a ‘given’ (known quantity) at any particular point in time.
There are a number of good articles you may find on the internet by doing a search on how a company’s stock price and market capitalization are determined.
Regards,
Harry Apostolatos
Sr. Complaints & Inquiries Specialist
Investment Industry Regulatory Organization of Canada
121 King St. W., Ste. 2000, Toronto, Ontario M5H 3T9
Toll free: 1-877-442-4322 | Fax: 416-364-0753
investorinquiries@iiroc.ca