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The stock price is somewhat independent of the underlying business. The stock price is based on what investors think other investors will pay for it sometime in
by dehrmann 4y ago
The stock price is somewhat independent of the underlying business. The stock price is based on what investors think other investors will pay for it sometime in the future, weighted against other investments.
- unity1001 4y ago> The stock price is somewhat independent of the underlying business Yeah, it was. Now it will likely have to be dependent on the underlying business. At least, in the US. In Europe it was always highly tied to the success of the company's business. To profits, especially. In the US it was more like 'this will take over the market and go big in the future'. But, a lot of major companies haven't been able to do that. From Facebook to Twitter. Not even talking about those like WeWork or Uber.
- rchaud 4y ago> The stock price is based on what investors think other investors will pay for it sometime in the future, And sometimes that 'investor' can be the company itself, doing a stock buyback. Or prices rising because of a corporate tax cut. Often times these swings in share price have nothing to do with the underlying business.