The Money PagesGreat Raincoats. Will the Stock Go Up?
People can love a product while its company’s share price falls.
Imagine a made-up company that makes strong raincoats. People love them. Must its stock price go up?
No. A stock is a share, or small piece of ownership, in a company. Its price is what buyers and sellers agree to pay.
Buyers may already expect the raincoats to sell well. Then cloth might cost more, or another company might make a better coat. Buyers can change what they think a share is worth.
Those hopes about the future are called expectations. They can be wrong.
A good product doesn't promise a rising stock price. Investors can lose money.
Money words
Expectation
What someone thinks may happen in the future.
A popular product does not promise a higher stock price. Investors can still lose money.
