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Stock prices are absolutely determined by investors. As in, that’s the only thing that matters. If more people are selling than buying, line go down. If more are buying than selling, line go up. That’s how it works.
You say “shareholders,” but that’s not accurate. the OP said “investors,” which can mean everything from long-term shareholders to day-traders throwing around options. The former doesn’t determine share prices, those who actively trade the stock do.
Honest question as I’ve been pondering this (and not my orb 😞) recently and I’m not sure if my reasoning makes sense.
You mentioned day-traders making option plays. I can see how that could be used as a signal by the rest of the stock market. Does that have a bigger impact than, for a lack of a better term, mega investors? I’m not a huge investor. My holdings are primarily in ETFs. But I have some money in my portfolio to play around with.
To me it seems like my stocks are affected more by what berkshire hathaway does for example than actual consumer/investor sentiment. To the point where I’m wondering if unless we band together, like GME, we are primarily along for the ride. All while massive firms, insurance companies, tech companies and other large holdings managed by small number of individuals impact stock price a lot more and with that don’t have an insensitive to sell holdings they bet big on.
Those companies are out to make as much money as possible, and I think the simplest explanation is they’re just better at predicting what a stock will do than just one person.
They may well have an entire team of people studying one company, to work out if they are worth investing in.
As for the options guys, anyone taking what they’re doing as gospel is an idiot, there are some spectacular examples on Wallstreetbets of people losing a fortune on options.
You’d think.
They mostly don’t really beat the market long term though.
Hedge funds and short sellers control prices. And they cheat.
Those are investors.
This isn’t a retort, and I don’t think short sellers are investors?
It is a retort.
Hedge funds do invest in stocks. On what planet are they not investors? They invest.
Short sellers are certainly a bit more ambiguous in how you’d classify them - but at the end of the day they’re still buying and selling stocks, and therefore investing and divesting. Classify them how you wish.
It’s also true that short positions only make up a small amount of the market.
Saying that there’s no such thing as investors or that stock prices aren’t influenced by the buying and selling of stocks is insane. That’s ultimately the only thing that influences them.
Retail orders don’t hit the lot market, they’re internalized by market makers