So, we are in the middle of the earnings season, and as you've probably seen, we have covered a majority of the big companies that have reported so far: Alphabet, Twitter , Microsoft, Atlassian, Paypal, eBay and Netflix. There are many others who have reported, and there are still others to come, but it is these times that usually have the greatest impact on the best public barometer of success. of a company: its stock price.
Sometimes the fluctuations are small, and sometimes they are important, but here is a good example of how each of these relationships and these days are among the determining factors of a company's stock price – Twitter:
Twitter shares are up about 5% today, and after posting earnings yesterday, they saw a rapid rise of 13%. Twitter at the time basically said that they could make money in the near future, and Wall Street likes profitability. But if you look at the dates when you see the craziest swings in the stock price over the last year, you'll see that they correspond to these dates: February 10, April 26, July 27 and most recently October 26 this year.
The course of action is critical for a number of reasons. This helps to define where a business is in its life cycle and what its value is. Companies also give you shares as part of compensation programs, so he must continue to do so in order to keep his employees happy and attract talent. Having a higher course helps defend the company against activist investors who want to make things happen – something no business, not even Apple, is immune to.
Whenever a company reports its financial guts, it gives the public – and Wall Street – the opportunity to tailor its expectations and see if the company is heading in a positive or negative direction. You could see a prolonged or prolonged decline after the gains, usually when the various analysts have read the numbers and indicated where they think things are going to happen.
Twitter, in particular, is a volatile and earnings-sensitive business, but it's not completely alone in these fluctuations. You'll see that's the case with recent IPOs like Snap, too:
Again, the dates align with some of the jumps and tweaks: August 10th and May 10th. Snap, as a recent IPO, is still a very volatile stock as Wall Street seeks to adjust what it expects from a new breed of advertising. So, as a result, its price of action can be everywhere.
As these reports are published, we have an idea of the direction of public companies. But it also gives us an idea of the performance of the sectors and helps to determine if we think that the areas are opportunities for startups and how much the still private overhead can have thanks to the various comparisons that they can establish with certain public companies.
You can view our full earnings coverage here for the third quarter .
Featured Image: Photographer: Yana Paskova / Bloomberg via Getty Images / Getty Images