why do share prices , rise and fall and how does it happen????

Answer 1

ok, we acknowledge that it occurs, however, the reasons for it can be as varied as plants on a mountain, bugs in a collection, tools in a toolbox, wines in a wine store...

The main thing is that Stock Price=Consumer Perception. Consumer being stock buyers and sellers.

Google's IPO was 100 dollars, pretty high for a post tech bubble stock. It hovered in that range, an continously grew and grew with positive news (new services like video, and take overs), and just before Google went nuts and it's stock broke the $500 mark, was when it announced it was taking out print ads.
http://today.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?view=CN&storyID=2006-11-06T063400Z_01_N05196834_RTRIDST_0_MEDIA-GOOGLE-NEWSPAPERS.XML&rpc=66
which probably gave consumers more confidence in it, and they bought more of it, making less availible, and raising it's price.

Disney fell from $37 to 15$ between winter 2000 and summer 2002, around the time of it's CEO turmoil (the coup where they ousted Eisner), and probably because Eisner let Pixar go... those combination of things wrecked the price for them.

There was a perio of time where marvel stock was less than 5 dollars a share, due to steady disinterest and flagging sales of thier coics, toys, and viewership of TV shows. Then something crazy happened... X-men, the movie, which was never a big hopeful, turned out to be pretty appealing, then, all of a sudden, Fox had the guts to release a a fairly budgetted movie with a risky irector (Sam Raimi, he made EVIL DEAD for christ sakes), calle SPiderman. This movie was hugely succesfful, an the next thing I knew, my shares went from 5, to 30, nearly 50 dollars a piece.

What else... hmmm.... GM is going down because thier sales are lagging, and they don't have a decent electric to offer, however, they're not out of business because they're huge. GM also has employee issues. Each employee that GM has costs 15 million ollars. Not just the wages an healthcare costs, each employee brings in pension fees, insurance, liability, an the worst part, each american employee prevents GM from hiring 15-30 outsourced employee. It's pretty terrible that americans don't recognize the effort invovled with making anything in america.

Walmart has no stock, it's privately owned by the Walton clan. But if they did, it woul be huge.

There's TONS of reasons why stocks go up an own, CEO issues, to seasons... Hershey does great near easter btw. Krispy Kreme used to be big business until they had to shut own 50% of thier locations duie to lack of middle management (ie, growing pains). YOu have to research and know what the heck you're doing, as Warren Buffet would say... "If there's no proven track record of success, you are only investing on promises, which is not how I work". You can't judge a company until you know what it is they make.

Answer 2

Share prices rise and fall based on "bidding."

When a company does well, the value of it's stock is perceived to be better based on the fact that it may share some of its wealth with shareholders in the form of "dividends." Therefore, the shares become valuable as an instrument of generating income.

When a company does poorly, the value that people are willing to pay for its stock goes down - first because the "dividends" will be smaller, and secondly because if it goes out of business, the stock will be worthless.

The "Stock Market" is just a place where people "bid" on stock shares. If I bid $10.00 a share for company A, and you've told your broker to sell at $10.00 a share, then we have a deal.

Answer 3

Share prices move for a number of reasons.

A share is a fraction of a company. If that company falls on bad times the price will drop.. if it comes into a multimillion dollar contract it will most likely go up.

ALSO - if the market likes the stock, ie. investor perception has gauged that the stock is cheap - then it might go up or down for demand and supply reasons..

Then - there are the extraordinary influences - like on S11... the whole market lost value but it was not a reflection of any one company underperforming... it was investors pulling their money out of the market as cash is safe... stock is not!

there are books written on this stuff - good luck!

Go study finance at university! I did! I love this stuff!!