What happens if shares fall

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Stock Advisor launched in February of CRM salesforce. This naturally decrease supply and increases demand, driving up stock prices. If news is expected by the majority of investors, the stock price is likely to remain largely unchanged.

And that can flip a seemingly simple relationship on its head. And expectation is the key here. Market expectations are always priced into any market price. Good news, right? They beat their forecast.

Because the actual earnings are less than the current market price can support, the stock price falls as investors sell off their shares.

This effect can be exacerbated by investors who simply copy what everyone else is doing selling off their shares rather than looking at the bigger picture.

And there are other occasions where seemingly bad news for a company may be good for their stocks. For example, a company makes redundancies. Bad news for the employees, yes. But it could be good news for the company and its stock price because expenses will be quickly and significantly reduced. This should increase earnings right away. It may not be a red flag, just a reaction to a slower economy.

A similar phenomenon can occur when a firm has to make huge pay outs in compensation for past mistakes. That sounds bad.