as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.
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does the profit of a company directly affect its stock or indirectly by causing people to buy or sell?
user
people implicity agree to sell stocks when a company does bad but, remember, when you sell the stock of a company that, in your estimation, 'did bad', someone else had to buy; otherwise, there is no sale. the someone else who bought your shares evidently disagrees with your assessment. did you sell because the company didn't earn a profit at all? did it not earn a profit because it's in a dead-end business that is slowly but inevitably declining to zero? something like sears holdings? or did it not make a profit because it is in an emerging market that will possibly someday become hugely profitable? something like tesla, inc.? did you sell because the company made a profit, but it was lower than expected? did they make a lower-than-expected profit because of lower sales? why were the sales lower? is the industry declining? was the snow too heavy to send the construction crews out? did the company make a big investment to build a new plant that will, in a few years, yield even higher sales and profits? what are the profits year-over-year? increasing? declining? usually, investors are willing to pay a premium, that is more than expected, for a stock in a company with robust growth.  as you can see, the mere fact that a company reported a profit is only one of many factors that determine the price of the shares in the market.
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