Discount

Discount. If a share price of a company is said to be at a discount, it usually means the price is trading below that at which the shares were issued.

This has happened occasionally with privatisations that went wrong, like the BP tranche of shares which was sold just after the market crashed in October 1987 or the flotations of satellite broadcaster, BSkyB and telecoms company Orange in the mid 1990's - these discounts normally disappear fairly quickly.

In some cases, it may mean that the share is trading below its nominal value.

The word is also used in the market in the sense of 'to make allowance for' - such that the share price of a company may already reflect a particular item of good or bad news.

See Also: Online share dealing service Stockmarket Centre

Last Updated: June 2007 © Moneyextra.com

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