Why Do Stock Prices Fluctuate?
Generally, the price of a stock is determined by supply and demand.
For example, if there are more people wanting to buy a stock than to
sell it, the price will be driven up because those shares are rarer
and people will pay a higher price for them. On the other hand, if
there are a lot of shares for sale and no one is interested in buying
them, the price will quickly fall.
Because of this, the market can appear to fluctuate widely. Even if
there is nothing wrong with a company, a large shareholder who is
trying to sell millions of shares at a time can drive the price of the
stock down, simply because there are not enough people interested in
buying the stock he is trying to sell.
Because there is no real demand for the company he is selling, he is
forced to accept a lower price.
