When a Company was expected and then made a profit of X $ then that X$ increased it's share price. or those the Sellers and Buyers [duplicate]

Question

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• Why does demand for stock rise when a company appears to have high future value? 3 answers

When a Company was expected and then made a profit of X $ then

That X$ increased it's share price. or those the Sellers and Buyers?

Is it because Company A did a profit of X amount, so X is now Added to valuation of the company and since Company is valued by its share it thus increases the value of each share.

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Is it just the buyers and sellers that decide the value or price of each share

Thanks in advance.

Answer 1

There are a few reason why share prices increase or decrease, the foremost is expectation of the investors that the company/economy will do well/not well, that is expectation of profit/intrinsic value growth over some time frame (1-4 qtrs.)there is also demand & supply mismatch over (usually) short time. If you really see, the actual 'value' of a company is it's net-worth (cash+asset+stock in trade+brand value+other intangibles+other incomes)/no of shares outstanding, which (in a way) is the book value, then all shares should trade at their book value, the actual number but it does not, the expectation of investors that a share would be purchased by another investor at a higher price because the outlook of the company over a long time is good.