Why does the share value of a company's stock increase or decrease?

3 Answers

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

The value of a company's shares increases or decreases as investors' expectations about the company's future change.  The more that investors think that the company will improve itself in the future, the more the price of the stock goes up.  The opposite, of course, happens when investors believe the company will run into hard times.  These expectations can come about because of factors that are specific to a given firm (such as a company coming out with an exciting new product) or they can come about because of broader factors in the economy as a whole (such as the uncertainty in Greece).

bewanju's profile pic

bewanju | College Teacher | (Level 1) eNoter

Posted on

the price of shares in stock markets is influenced by forces of demand and supply. when demand is high then the prices will shoot and vice versa. the demend of a stock will depend on the performance of the company, dividends paid or expected, growth and expansion programmes and future expectations of investors about the company.