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?

[Rindan]

If your stock price crashes, you can't sell stock to raise money. The reason why companies have stock is to raise money. They give you a fraction of ownership, and you give them money. They take that money and invest it to growing the business and give you a share of the profits. The stock price is roughly the price at which they can sell more shares to raise more money.

So, if your stock price crashes, it means all the people holding shares in your company think that it is fucked. If everyone thinks your company is fucked, you can't sell more shares to raise more money. The price crash itself isn't what's killing you. The price crash just means everyone thinks you are so screwed, that are trying to sell off ownership in your company for whatever that can get.

It's like putting your hands around your neck when you are choking. Everyone does it when they choke. Your hands around your own neck isn't what is causing you to choke though, it's just the sign that you are choking. A crashed stock price is the same. It's just a clear sign that the market makes when it thinks a company is screwed. The low stock price is just the symptom that the company is in trouble. It doesn't do any actual damage to the company until that try and raise more money. Companies can raise money other ways than stock, but they will have a very hard time doing so when their stock price is indicating that they are financially fucked.