Jun. 24 at 8:49 PM
$VTGN In the stock market, it is common for stock prices to surge by nearly 20% before official major announcements (such as M&A, clinical trial results, the unveiling of innovative new products, or earnings surprises). Investors may wonder, "Why is the price rising before the announcement?" The main causes can be summarized into four key points.
1. Information Asymmetry and Non-public Information Leakage
This is the most common yet bitter reality. No matter how strictly security is maintained, numerous people (internal employees, law firms, accounting firms, investment banking consultants, etc.) become involved before a major corporate announcement.
• During this process, rumors circulate in the market, or forces that have obtained non-public information in advance (insiders or institutional investors) engage in **preemptive buying**, causing trading volume to explode and the stock price to skyrocket.
rmarket.
