If there is a sufficiently impactful information, investors will reassess their valuation and pricing strategies. Company X's stock are worth 100 dollars. A sc

If there is a sufficiently impactful information, investors will reassess their valuation and pricing strategies. Company X's stock are worth 100 dollars. A scandal breaks out, revealing that their second most important product must be removed from the market immediately due to health concerns. The company will survive, as it has other products, but it is clear that their income will go down and they will spend a fortune on litigation. Suddenly Investor A wants to sell this stock, because they don't want to hold a risky asset. But who will buy it? Investor B is willing to buy this stock, and will reassess their targets, decide that this stock is now worth around 75, and only buy it at this price. Investor A has two options now: hold a risky asset, or take a loss. If they decide to take a loss, the stock is now priced at 75. If they decide to hold it, then the price might be artificially 100, but this asset is not liquid now, as nobody is willing to buy it at 100. So the price has already dropped, before any transactions happened. See also pre market trading: https://www.investopedia.com/terms/p/premarket.asp https://www.investopedia.com/terms/p/premarket.asp