As I understand it, when people buy a share of stock, the price goes up. When people sell it, the price goes down. So what does this have to do with the company itself that this stock represents? For example, if a bunch of people wanted to make Apple’s stock price go down, they could just agree to sell their shares. So what does the actual stock price have to do with the company?
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Stock is ownership in the company itself. It’s not as simple as buying stock makes it go up and selling makes it go down. In order to sell the stock, somebody has to buy it. So the same amount of stock still exists.
It has to do with supply and demand. The more successful the company is, the more people are willing to pay for a share (a portion of ownership in the company) of stock. So the price goes up because it is desirable.
Likewise, if something bad happens in the company, people don’t want to be part of it and will part with their stock for less than what it is worth so they can be free of it. This brings the price down.
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