2. Buy Back of shares

The company buys back their own shares from the open market. It is a way of confidence boosting made by the corporates. Sometimes the company goes for a buyback to correct the prices if it is unreasonably low. They buy these shares at a higher market price as nobody would like to sell stocks at a lower price. If the company management decides to buy the shares at a lower price, it only means that the company doesn’t think their shares are worthy of good market price. This policy reduces the number of stocks available in the market and hence increases the earnings per share. We can say this buy back policy affects the stock prices in a good way.

3. Stock Split

This is a situation where the company splits into two or more. The company takes such a step when it thinks that its stocks are very expensive and the investors are finding it difficult to invest the amount it requires. This splitting of stocks increases the demand of the share, its prices and also the number of investors’ increases as it becomes easy for them to invest at low amounts. Splitting share also brings many retail investors in the scenario of buying shares at low price and making profits. But this process won’t bring any change into the fundamental basics of the company. There is also a reverse process known as reverse stock split, which means combining two or more shares of a company into one share.