Company announces bad news and then the stock price goes UP. WTF? This often seems counter-intuitive but is pretty simple to understand if you keep in mind tha

Company announces bad news and then the stock price goes UP. WTF? This often seems counter-intuitive but is pretty simple to understand if you keep in mind that markets are always forward looking. For instance, if Company A typically makes $1m in profits each year, you can ascribe a value to it. However, if at some point, you suspect that their profit is going to drop 80%, you are going to devalue their stock accordingly. However, if the company announces that their profit "only" dropped by 60%, you have likely undervalued them (since you thought it would be worse) and it makes sense for you to increase their price. So to get back to your initial question, the answer is the market thinks, right now, that things will not be as bad as they initially assessed.