When watching a company's stock price go up and down, some people wonder what percentage or number of shares is necessary to move a stock's price, and whether there's some entity that determines this number.
The answer lies with the classic battle of supply vs. demand. The stock market is really very much like an old-world public market where each buyer haggles with the sellers. Shares end up trading at different prices to different people because they trade at prices that individual buyers are willing to pay and what sellers are willing to take.
Imagine that shares of Spackle World (ticker: SPACK) close around $30 each at the end of trading one day. Then Spackle announces that it has recently been experiencing an amazing growth in sales and that it expects to report record earnings next month. All of a sudden, there may be a surge in demand for Spackle World shares. The very next shares to trade may go for $35 each or more. The price won't necessarily inch its way up.
Similarly, if Spackle World announces that it's going to file for bankruptcy, or if spackle is found to cause some terrible disease, then there will likely be many more sellers than buyers, and the price will quickly be considerably lower. If the stock is immediately perceived to be worth just pennies per share, it's not going to sell for $29 per share, then $28, then $27, and so on. It'll immediately be worth a lot less.
It's all a balance between supply and demand, between what people are willing to pay or accept.
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