How PR affects stock prices

There are many factors that might affect the stock prices of the company. In the first place, those are economic factors that include indicators like interest rates, inflation, deflation, as well as economic and political shocks, or certain changes in the economic policy of the country.

However, apart from that, we may also highlight factors like investor sentiments, the overall industry performance, and media releases. And the latter is the one you, as an entrepreneur or just market player, shall focus on the most, presumably. And we will explain why.

What news and press-releases highlight?

Usually, in company news and press releases, you will be able to find information like recent accounting mistakes or loud scandals, a launch of the new service or product, merge with another entity, announcement of dividend payment to the investors, earning (current and predicted ones), etc.

The importance and power of PR

It was hard and nearly impossible previously to estimate the coverage scope of PR campaigns and what effect it will have in advance. But as the whole marketing industry started developing, it became clearer that the advertisement and promotion actions can influence the overall performance of the company in general.

Firstly, a proper PR campaign might increase trust and ensure the stability provided by the company to its customers. That, in turn, will positively affect the stock prices of an organization. That is quite obvious, isn’t it? Once investors see that the company shows a constant growth and through that benefits its shareholders, they will start investing in those stock even more.

Secondly, PR causes the growth of the company and its followers. For instance, let’s take a look at the cryptocurrency sector, the Forex broker in particular. If there will be news released regarding the growing popularity of the platform, it will obtain new traders that would like to cooperate with that broker. As at the end of the day, everyone is looking for a reliable partner with whom to work with beneficially.

Thirdly, PR is one of the main tools for reputation management. Thus, with a good reputation, the stock prices of the company will increase as well. However, imagine that there was a scandal update released into the public, think what will happen next. Right, the stock prices will go down drastically. To provide you with a good example, try to recall the case that happened with Apple in 2018. When the development team of the company confessed that they were intentionally loading the old iPhones to make people buy the new ones. Once the world found that out, the stock prices of Apple fell down dramatically within only one hour.

Thus, drawing a bottom line, if the company does not control the PR actions around it, that can lead to serious consequences connected to both its reputation and liquidity. As the way the company will be doing depends directly on how the existent and potential customers perceive that organization.

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