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The stock price is determined by dicounted cash flow valuation of profit, or at least what stock traders estimate it to be. If the stock price is crashing, that
by wcoenen 7y ago
The stock price is determined by dicounted cash flow valuation of profit, or at least what stock traders estimate it to be. If the stock price is crashing, that means traders are predicting reduced profits. Reduced profits mean layoffs.
- AndrewUnmuted 7y agoThe stock could also be crashing because the perceived value of the asset was distorted by market conditions, and the stock index corrections have now produced a far more realistic and scary environment in which value is better understood.