Submitted by dirtycumsock69420914 t3_zyuixx in explainlikeimfive
mayners t1_j28754f wrote
Reply to comment by adept-grumblefish28 in eli5; how does the stock exchange work? by dirtycumsock69420914
I'd add to this that people don't always get a share of the profits, known as dividends, only certain companies pay out dividends.
And also the price is partly affected by things like the estimated value of a company both now and down the line in a few years. Things like good news of expansion or new products will help the price while bad news like recession or increased fuel prices will reduce the price.
For example during covid most companies went down in price because they weren't allowed to open, while PPE companies increased because of both being allowed to operate and increase in demand.
adept-grumblefish28 t1_j28qwia wrote
Yes, I should've added that. Thank you.
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