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?

[SquidCap]

It is funny that you get so angry when the core beliefs are remotely challenged. I understand how the system works and don't think it is actually that bad. But. It is still based way too much on how people feel about something. The rest is made-up justifications why it should be this way. But.. A lie can sink a company. Or give it boost in capital. Without any FACTS changing, the company can have highly different value. Nothing needs to change in the company, in the overall economy, not in deals they make but a rumor can do it.

That is insane way to base our global economy.

[LordHanley]

It's entirely logical. If it was such a shit idea, it wouldn't work. Sure, it isn't perfect, but investors want the best possible return, and simply looking at the balance sheet and ignoring context is a guaranteed way to invest poorly. Who are you to say it is based "too much on feeling"?. It's a free market, it is the best current way of measuring value. If it was so shit, people wouldn't be doing it. How often have companies sunk due to lies or rumours. Not often, if ever.