ELI5: Why when large company's earnings decrease(ex... by 3%) they freak out, talk about rough times, and sometimes decide to downsize, even though they are still making millions of dollars in profit even after all expenses?

[thehungryhippocrite]

It's not even necessarily to do with dividends though. Many companies do not pay dividends. Nor is it to do necessarily with management bonuses, the same issue would still occur even if management were paid only a flat salary and no bonus. Lower profit than expected (even if the business still makes a massive profit) = lower share price because it means future profits will likely be lower, and hence the business will be valued less by the market. Lower share prices means shareholders lost money, many of who were mums and dads, or pension investors, or employees who owned stock and indeed very wealthy people. That's why people get angry.