AboutPaul Henneman Expertise Stock forecasting and fair market valuations.
Experience
Past/Present clients CBSMarketwatch.com, Hoovers.com, Multexinvestor.com, Bank of NY, numerous hedge funds and institutions, other partners and clients can be viewed at http://www.valuengine.com/about/careers.html
Question how is the listing price of a share decided at a stock exchange?
Answer Thank you for the question!
Usually the company that is going public and the underwriting firm (Investment bank that is sponsoring the public stock offer) will together determine the initial listing price of a stock. This is usually done by looking closely at a companies finances, revenues, expected growth, and other factors to determine how high of a stock price is realistic, and investors would be willing to pay.
After the initial public offering of a stock, the price moves up and down based on demand and the free market environment that stocks trade in. If demand for the stock is high, the price is driven upwards by investors willing to pay more for shares that are increasingly hard to find to buy. If the company is doing badly, you have more sellers than buyers and the stock price falls.
There is a brief definition on Wikipedia that may be of some help:
