Why Do Shares Go Down On Good News
We’ve all seen it happen.
When a company publishes “good” results but the share price goes down anyway.
For most new investors this phenomenon can be one of the most confusing realities of the small cap stock market.
We have been around small caps for more than 20 years and have seen plenty of companies publish positive news only to get a negative reaction in the share price.
But why does this happen?
At a very high level, just like most things, the company’s share price is a function of supply and demand.
If more investors are looking to sell than are buying, then the share price goes down and vice versa.
These supply and demand drivers are all a function of expectations and sentiment.
So when good news is published, in an…
