Natural Stock Price Fluctuations
Stocks will fluctuate based on the company’s performance and functional efficiency. Global and agricultural catastrophes, economic conditions, decisions made by political authorities and big banks will also cause stocks to increase or decrease. The average investors and stock traders along with the media are also major factors.
Media Manipulation
Television, e-mail newsletters, forums, and radio stations can all be catalysts to huge stock price fluctuations. If the company you invested in is doing well by making a good revenue and positive news articles are coming out, the stock price will increase. Prices will decrease when the opposite happens. News articles about bad management, the risk of bankruptcy, terrible products, reverse stock splits, and other negative media reports will decrease and devalue the price of the stock. False and misleading news can either drive the stock up if it’s positive or down if it’s negative. But it’s illegal!
News Hype Manipulation
The intent to hype up a stock with biased and false information is illegal. Big investors, hedge fund managers and big banks on Wall Street with a large amount of buying power can move the stock price in their favor. The short sellers will benefit when negative news or an alert on put options is announced because it causes the average investor to sell their shares. Positive news and a call options alerts will cause investors to impulsively jump in and buy shares, benefiting the bullish investors. If the news is false or misleading, the stock will head in the opposite direction in a short period of time, causing investors to lose a large amount of cash.
The Market Is Rigged!
Big investors on Wall Street with huge buying power manipulate stocks to make a large amount of cash in a short period of time. Sometimes they collaborate with each other and work as a team. They also have more sources of valuable information than the average investor. They pay analysts to either put out false information or get undisclosed info on which direction the market is heading.
Whether you’re a short or long-term investor, it’s important to keep in mind that manipulation can occur in any stock. No matter how good you think the company is, always use critical thinking and question every move the company makes.
Thank you for reading!
If you want to get a visual on stock manipulation or learn how to invest in the stock market and profit. Check out some of the popular books and movies down below!