What causes a stock to rise and fall?

What causes a stock to rise and fall?

buy/sell orders

feels. literally.

How the fuck do companies work anyway?

The stock wouldn't go down if people didn't sell. Plain and simple. I listen to the news, and I'll hear how housing "dipped" last month which cause "stocks to go down" or someshit. THEY ONLY GO DOWN BECAUSE PEOPLE SELL.

IF NOBODY SOLD, THEN THERE WOULDN'T BE THIS DOMINO EFFECT OF "OHSHIT, STOCKS ARE PLUMMETING. I BETTER SELL TOO." *STOCK PLUMMETS EVEN MORE*

I can't into economics, but can there please be a better system than this shitty one where old, rich guys technically own companies because the companies, regardless of their CEOs or Presidents or whatthefuckevers have to appease these old rich retards?

Why does a company have to be depended on their stocks? If they make a product, and it sells, badabing badaboom, company has infinite monies now.

I can understand start-up capital. To even make a product, you need the money to be invested to make the product to begin with. But when the product makes the money, can't the company just give back to these rich retards what they paid or something, and then just continue to make products on their own autonomy?

I fucking hate stocks and markets. Better system nao plz!

>IF NOBODY SOLD, THEN THERE WOULDN'T BE THIS DOMINO EFFECT OF "OHSHIT, STOCKS ARE PLUMMETING. I BETTER SELL TOO." *STOCK PLUMMETS EVEN MORE*

People aren't perfectly rational.

And the value of stocks is based on their earnings. If a company is doing shit people sell because holding that stock doesn't have as much value anymore.

>I have no idea what Im talking about at all
>Please change the system

So it goes down when people sell?

This is the dumbest post I've ever seen, you realise the share price isn't the only important thing for a company right? If it's profitable then the profits go to the owners, they make money if the company does well, it's not just all a gamble.

The owners are owed the profits because they fronted up the capital to start the business in the first place, it's not a broken system, then there's other factors to consider like whether the shares perform well as a growth investment or as income (dividends). There's a lot more to it than you think.

Why do companies care about the share price? They aren't the ones selling the shares, other shareholders are.

If everyone in Coca-Cola sold their shares, the company would still be producing the same stuff right? When you "invest" in shares in a company, how is that investing in the company since you're paying the seller and not the company?

Something is inherently flawed with it though when a company makes a product (and let's deem the product "essential" for shits and giggles) and it makes millions of dollars, and everything is looking good, but "investors" don't look at "profits" as much as they do "growth".

The product is making the money. That should be the end of it. But if sales are plateauing because it's essential, but not falling (well, maybe a little here and there, but it's always averaging), it doesn't matter because it's not GROWING. And this causes companies to have to take risks and usually make things shittier to "appease their investors"

Call me a luddite and call me out on the overuse of quotations, but this business model sucks shit.

It's like when youtube or facebook changes their layout and algorithms every goddamn week. JUST LEAVE IT ALONE. IT AIN'T BROKE, SON.

Yeah this system fucking sucks look at how stupid and pointless the technological advance of the past 50 years has been, wouldnt it be better if we seized the means of production from these old rags like cuba or china did?

When there are both buy and sell orders posted to an exchange they get matched up at the market price. When there's more buy orders than sell orders (lots of people want to buy) then more sellers jump in offering a slightly higher price. Conversely, when there are more sell orders than buy orders buyers will jump in offering to buy the stock for a fraction under its market value. As the consensus of the true value of the security goes up and down so does the market price on the exchange, which is more akin to the going rate for the security.

it also depends on alching price

because the company issues shares

The investors ARE the company you moron, the "conflict" you come up with is imaginary.

Jews

This

I'd rather use this thread than make a new one to ask my stupid question.

Is there going to be an economic recession or depression this year?

to understand this, you need to start with a very simple explanation.

A company wants to go public and show up on the stock market. It offers common shares of stock at a price evaluation it thinks it needs to expand/do something eventful/be valuable so that people want to invest in it. Lets say President Dick of Dicks Blow Inc has an automatic blowjob device that he wants to take to the global market but doesn't have the equity (cash) to do so.

So what he does is issue 100,000 shares of common stock which give some shareholder rights but not control of the company. He wants to set the price at 10 dollars a share, thus if everyone buys out all the shares, the company gains 1 million dollars in equity to invest in his business. He is now a public company who the shareholders who look forward to quarterly reports and updates on the company moving forward. Also if more people were interested in buying these shares than shares were available, now you have supply and demand, the price increases because someone offers to buy them at a premium. The price increases to 12 because someone will now buy them at 12. Now lets say at the first quarter results, you had a fantastic start and doubled your profits, giving a reward to shareholders, the shares are now more valuable and thus the shares increase in demand as more people want in.

But lets say 5 years later and after amazing growth you suddenly have a terrible few quarters, now, they are not finding as many people interested in owning your stock. The value decreases because there is not as many people interested unless your share value hits a point where people are again ready to buy them.

It is mostly supply and demand, behind every share purchase or share sold, there is someone on the other side of that mirror that either wanted that share more than you, or were trying to capture their gains.

Lmao you realise that growth and profit are synonymous right? Increasing profit is growth and it is what investors are looking for, in the majority of big multi-billion dollar Healthcare companies which provide necessary goods and services and expand through acquisitions, the share price is very stable, with a trend that follows their profits. What you need to understand is that not all equity is in the former of shares, so the company really doesn't have to bow to the will of all shareholders unless they actually invested capital for the startup of the business.

Unlikely to be a depression but yes there may well be a recession which is a natural economic fluctuation, it won't be like 2008, that was an anomaly. Really no need to worry about it

so you buy a stock to "earn" a part of the income of whatever it is stock you bought by selling the stock for more than you bought it and that's "all" stocks are?

The stock market behaves differently from all other markets and it also behaves differently from the stock market - me

No one is forcing companies to go public.
If they stay privately owned, the "retards" you speak of have no ability to sell or affect the price.
It's a trade off.

Supply and demand.

serious question, when did owning stock go from owning a modest form of making money in the form of dividends based on how much money the company is making, and this speculative gambling bullshit?

Why can't we go back to the days of a handful of shareowners who make a modest bit of interest on their investment and have an incentive to grow the business?

>Why can't we go back to the days
The days of what? When you couldn't buy or sell your investment at a time of your choosing? Because this is the rule you'd have to impose to create your utopia.
Oh wait, it never happened, because that's some bizarro world shit.

Shareholders don't grow the company... and you still can invest for dividends that's why people invest in stable companies with not much growth, because those companies know that in order to keep shareholders happy they need to pay out part of their profit in dividends. You just have to look at the various dividend ratios it's not rocket science.

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