>are they selling shares because they predict other people will sell shares and so they are simply 'beating' the rest of the market to avoid the predicted loss?

>are they selling shares because they predict other people will sell shares and so they are simply 'beating' the rest of the market to avoid the predicted loss? Or are they selling the shares because they actually believe they are worth less due to the report? Those are two sides of the same coin. Stock prices are probabilistic in nature, because we're all operating with incomplete information. Consider an envelope that has randomly been prepared with either a $1, $5, or $10 bill inside (let's say someone rolled a die to determine the bill, put the bill inside, then gave it to someone else). Assuming equal probabilities of each bill, the envelope would have a market value around $5.30. If you wanted to buy it, that's about what you'd have to bid to win. Now imagine the person who prepared the envelope revealed that the $10 was not inside. Everyone bidding more than ~$2 would retract their bids, so now you only have to bid ~$2 to win it. They don't believe the value of the envelope actually decreased (the bill stayed the same), but now they have information that changes the market price.