But with rapid trading the company can become insolvent and cease trading on a rumour.
Even if they are rescued (and not ripped apart, workers laid off, their wages paid for by tax payers) then the disruption will enable a less efficient rival to steal some of the market.
With slower trades the truth of their viability might be seen.
Even if the widget factory is saved there is disruption in supply, (who will give a contract to a company if they might not be there tomorrow?) so bad news is a self fulfilling spiral.
It costs the widget company, those investors who knew it was OK and didn’t flee, and tax payers.
Value should be a known it isn’t.
It is only a perception in the current market.
Traders do not care if a company is good at making widgets or not.
You don’t have to do that any more franglais. For a large number of shares you can buy options instead. Which is just placing your bets. No share needs to change hands for you to win or lose. It’s pure betting.
And more thrills for those who really like risk. They can sell options, as well as do what most relatively sensible people would do with options and stick to buying them only.
Yes money is made these days more on volatility (ie stock movements) than on fundamental value or on more staid instruments like bonds.
This is where it’s rumoured that the orange one and friends are making a killing. Potentially by inside knowledge of upcoming volatility and its direction, if gossip is to be believed.