Hello Monzer. It depends. There are a lot of irrational or speculative traders that will purchase stock in an extremely overvalued company with no earnings. On the other hand, it is possible the company experienced one-time losses and is expected to recover next quarter.
One other thing I need to clarify for you - all stock prices are positive. The stock price is the price that one is willing to pay for a share in a company. There is no situation where a stockholder would owe money to the company, which is why there are no negative prices.
Not necessarily. Stock prices are based largely on expectations of future earnings. Since expectations are nothing more than predictions, they are often wrong. Not irrational though.
It takes all sorts to make a market (fortunately)
a company's stock sells for $2.25 per share even though the company had large losses. does the positive stock price indicate that some investors are irrational?
