What is a false market?

False market is basically a type of investment environment in which the exact values ​​of different companies or shares cannot be determined for some form of distortion. For example, if the company is aware that it does not start its anticipated goals for a fiscal year, it is obliged to share this information with investors. By not revealing this, society can then maintain the expected income that is unrealistic, but which are likely to be beneficial for society. This creates a fake market on which individuals and brokers are likely to overestimate the correct value of this company.

There are several different ways to create a false market and can be more convenient for different individuals. In one simple way, this can happen in a situation where the company does not properly publish details of its fiscal projections. At the beginning of the company year, the company often provides growth information over this Anor. Investors can then use these projections to assess expectedthe company's values ​​and potentially buy shares.

As a year proceeds, business is usually necessary to detect information about the status of these original projections quite regularly. For example, if the company said that this year 1000 units had to be sold to achieve its goals, then regular updates could indicate how the sale is going on. Six months a year, if the company sold 500 pieces, this is a goal for the planned goal. This type of publication prevents false markets because investors are aware of how business is doing and can respond to this information accordingly.

False market may occur if the company does not properly reveal information about its progress towards the goal. For example, if the company does not reveal that after nine months it will not sell only 500 out of 1000 units, then this could create unrealistic expectations for investors. In this way withE creates a false market; Investors and brokers do not know that all the information they need to make the accurate sharing values. In this way, it is likely to be the value of society as higher than it should be, allowing the company to achieve greater profits per stock than it should.

The opposite type of effect can also be the result of a false market that can damage otherwise stable society. People can spread negative rumors and lies about the value of society in a harmful way, such as incorrect profit or loss projections. As this information becomes investors, the total value of the company's shares may decrease. This results in a fake market where a competitor or other business could control the takeover of a malignant company.