Covers earnings reports, filings, and corporate events such as capital raises, dividends and splits. When a stock makes a big move, one of these is usually behind it. 31 terms in total.
Information a company is required to give investors. In the U.S. it is filed with the SEC (8-K current reports, 10-Q quarterly reports and so on); in Korea it is posted on the Financial Supervisory Service's DART system. LightView reports check filings from the last 60 days.
The period when many listed companies report quarterly results in a cluster, starting a few weeks after the quarter ends. Large-cap results can set the mood for a whole sector.
Rough results a company releases before the audit or review is finished. Large Korean companies often disclose preliminary sales and operating profit right after a quarter ends, with the final figures following later in a report.
When reported results come in well above market expectations (the consensus) it is an earnings surprise; well below is an earnings shock. Share prices react more to the gap versus expectations than to the absolute size of earnings.
e.g. Operating profit expected at $1B, reported at $1.3B: a 30% earnings surprise
The company's own outlook for next quarter or the full year. Even with good results, the stock often falls if guidance is below what the market expected.
A call or webcast after results in which management explains the numbers to analysts and investors and answers questions. It reveals outlook and tone not found in the figures, and the share price can change direction during the call.
Activities or events in which a company explains its business and strategy to investors. They include earnings presentations, investor days and briefings for foreign investors, and the materials are usually posted on the company website.
The main documents U.S. listed companies file with the SEC. The 10-K is the annual report, the 10-Q is the quarterly report, and the 8-K is a current report filed when something important happens, such as an acquisition or a management change. Business risk factors and detailed figures appear most fully in the 10-K.
Reports Korean listed companies file regularly on DART. The annual report covers a full year, and the half-year and quarterly reports cover their periods, with business descriptions and financial statements. They contain details such as revenue mix, major customers and the largest shareholder.
The opinion an accounting firm gives after reviewing whether a company's financial statements are prepared according to standards. The types are unqualified, qualified, adverse and disclaimer. In Korea, anything other than unqualified can be grounds for an administrative-issue designation or delisting.
When a company sells shares to the general public for the first time and lists on an exchange. The shares you are allotted by subscribing are called IPO shares. On the first trading day the price often rises or falls sharply from the offer price.
The process before an IPO of collecting the prices and quantities institutional investors want in order to set the offer price. The higher the oversubscription and the more institutions bidding high, the more likely the offer price is set near the top of the range.
An agreement that bars major shareholders, institutions and others from selling shares for a set period right after listing. The price can weaken ahead of the lock-up expiry on worries that selling will hit the market.
When a company issues new shares and sells them for cash. It raises funds for the business but increases the share count and dilutes existing shareholders' stakes. How the money will be used (investment versus paying down debt) often decides how the stock reacts.
When a company moves accumulated surplus into capital and hands out new shares to existing shareholders for free. The share count rises, but the price is adjusted down by the same proportion, so company value is unchanged. Still, it is sometimes read as a sign that the company's finances are comfortable.
e.g. In a 1-for-1 bonus issue, 10 shares become 20 and the price adjusts to roughly half.
A reduction in existing shareholders' stake value because the share count rises through rights offerings, convertible bond conversions, stock options and so on. The same earnings are split across more shares, so EPS falls.
A corporate bond with the right to be exchanged for shares later at a set price (the conversion price). The company can borrow at a lower interest rate, but conversion increases the share count and dilutes existing shareholders.
A corporate bond that comes with the right (a warrant) to buy new shares at a set price. Unlike a CB, the bond stays in place, and exercising the warrant means paying more cash to receive new shares. This is also a possible source of a higher share count.
A term that lowers the conversion price of a convertible bond or bond with warrant when the share price falls. A lower conversion price means more shares on conversion, so the dilution burden grows.
A buyback is when a company purchases its own shares in the market; cancellation is when it destroys the repurchased shares. Cancelling reduces the share count and raises value per share (EPS). A buyback without cancellation is seen as less effective, since the shares can be sold again later.
A cash dividend is a company paying part of its profit to shareholders in cash. Paying once a year is a year-end dividend; paying every quarter is a quarterly dividend. Quarterly dividends are standard for U.S. companies, and more Korean companies are adopting them.
The date that determines which shareholders receive the dividend. You must be on the shareholder register that day. Because of settlement timing, you actually have to buy by a trading day before the record date. In Korea, each company can set its record date in its articles of incorporation, so check the disclosure.
Dividing one share into several. The price falls proportionally and the share count rises, so company value is unchanged. Companies do it when a single share is too expensive, to make it easier for individual investors to buy.
e.g. Splitting 1 share into 10 turns a $1,000 share into 10 shares of $100 each.
Combining several shares into one. It is often done when the price has become too low, and in the U.S. companies sometimes do it to stay above a minimum price and keep their listing. Company value does not change.
Ways of carving a business unit out of a company into a new one. In a spin-off (Korea's "personal split"), existing shareholders also receive shares of the new company in proportion to their holdings; in a vertical split (Korea's "physical split"), the original company keeps 100% of the new one. There is controversy that listing the subsidiary separately after a vertical split reduces value for the original shareholders.
Two or more companies combining into one. The key is whether the exchange ratio (how many shares of one company are given per share of the other) is favorable to each company's shareholders. Dissenting shareholders are sometimes given the right to demand that the company buy back their shares.
A catch-all term for buying or merging with another company. Usually the target's stock rises on a takeover premium, while the buyer's stock can weaken on concerns that it overpaid.
A public announcement that a buyer will purchase a company's shares from shareholders within a set period at a set price. The price is usually above market, and the aim is typically to gain control or to delist the company.
A trade in which a major shareholder or institution sells a large amount of stock in one go to a pre-arranged buyer, before the market opens or after it closes. It is usually sold at a small discount to the market price, so the stock often weakens right afterward.
Giving employees and executives the right to buy company shares at a set price, or the shares themselves, as pay. It helps retain talent, but when shares are actually issued, existing shareholders are diluted. Tech companies in the U.S. have large stock compensation costs, which is why Non-GAAP results differ from GAAP.
When the shareholder with the biggest stake changes. Control often changes hands and the company's direction can shift sharply, so this is treated as an important disclosure.