The purpose of this study is to discover and convey the key factors that affect the movement of stock of the Oracle Corporation. Oracle Corporation is a Multinational computer skills firm located in America. It specializes in marketing and developing enterprise software products and computer hardware systems. It’s headquarter is in California. The company has more than 113,644 employees internationally. Additionally, the company builds database development tools and systems of supply chain management, enterprise resource planning and customer relationship management.
There is no accurate method of determining the movement of stock prices; however, there is a general consensus that the stock prices, like everything else, are dictated by the demand and supply. Therefore, the factors affecting the demand and supply have a direct influence on the prices of the given stock.
These factors are broadly categorized into two:
- Internal factors
- External factors
Internal factors refer to the conditions that are under the direct control of the company that affect its share prices. They include;
Performance of the company
The better the company performs, the better the public perception of the company, which translates to better prices for the shares (Alexander’s, 1961). Generally, Oracle Corporation Movement;
- Performs better than its competitors in terms of sales and management, which is why its share prices in America are higher than those of its competitors, such as the IBM fashion and Microsoft Corporations.
- Change in management. If a company is performing badly, then a change in the management inspires optimism among the prospective investors, thereby raising the demand for the share of the company and consequently raising the prices of the shares (Cowleas 1961).
Creation of new assets
When a company acquires new assets its value increases. This leads to a corresponding increase in the share valuation. The reverse is also true. When the Oracle Corporation ventured into overseas markets and started publications in new markets, its value went up. Although these new publications were later registered in the countries where they are located, this led to a decrease of the prices in the America stock exchange, but the total value remained to be the same.
Dividends and earnings
The earning of a company is the total profits that the company earns; the dividend is the amount of money that is paid to the investor after the company has deducted money for investment on behalf of the investor. Generally, the more the investment, the more the values of the shares as the investment is converted into capital, which increases the value of the company, with reference to Oracle Corporation, this is seen in the fact that the share prices are higher in period before and after the dividends are paid.
These are factors that affect the performance or the products of the company that are outside the company’s direct control. Such factors include strikes, civil unrest, government policies, market conditions, competition, among others.
Oracle Corporation was as affected by the recession as any other company, especially because its product are considered a luxury, its share prices hit an all-time low in this period (as seen in the graph below).
The stock prices are also affected by inflation in the sense that when there is high inflation, which ideally means the value of money reduces, the products of the company also increases in prices, which means more money for the company, consequently, the stock value increases, which is why the stock value of Oracle Corporation is much higher today than when the company started trading in America in 1977.
In conclusion, the stock market price of any company is affected by internal factors such as the company’s performance, change in the management, creation of new assets, dividends and earning. It is also affected by the external factors such as investor behavior, competition, economic conditions and government policies.