material fact

Material News

Information likely to affect a stock's price. Examples include mergers and acquisitions, information on earnings over the most recent quarter or year, or announcements of regulatory changes. If material news is particularly good or bad, it can cause large fluctuations in the stock's price, increasing its volatility. For this reason, publicly-traded companies usually hint about what material news will say before they actually announce it. This allows the market to absorb the information gradually so as to reduce pressure for volatility. Material news is also called material information. See also: Priced out.

material fact

Any fact that is relevant to a reasonable person making a decision. For example,

• Real estate agents must disclose material facts known to them about the condition of property.

• Some facts, although they may be material, cannot be disclosed unless the seller gives his or her permission, such as the fact that the seller or a prior owner or occupant of the property was HIV-positive or had AIDS.

• Legally actionable fraud is a misrepresentation of a material fact. If there was a misrepre- sentation, but the fact was not material, there is no liability for fraud.