All about potential. When I was a relatively new investor, this used to drive me crazy. I'd buy a stock with excellent earnings, that were ramping up quarter to quarter and the company would report great earnings and drop. Never made sense to me why the market worked that way when you'd see the opposite happen. A stock with negative earnings for years would report another huge loss and the stock price would rise. Apparently it isn't always about what a company actually is doing in the present, but what they potentially can achieve in the future. I still shake my head at the price people are willing to pay for companies losing money, but I've been buying into some of these companies, especially in the biotech area, that have a huge future earnings potential and have been doing very well making money.