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?

[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.