Wow so much to unpack in this one. Stock value as is with the value of anything is easily defined as the price at which a buyer and a seller are willing to transact. It is that simple. House seller says his house is worth a million dollars and he has no offers then the house is not worth a million dollars. If a buyer offers $800k and he says yes then at that moment in time the house is worth $800k. That simple. You can roughly estimate the "value" of a company the same way you look at an individuals net worth, value of what they own (factories, land, machines etc.) vs what debt they have (loans, etc.)
What I find interesting about this whole situation is that these Hedge Funds have been running the market for years, and they do not only play in stocks, they play with bonds, commodities, futures,, any financial instrument they can find. They control massive amounts of capital and look specifically at markets they can manipulate. Once upon a time I traded natural gas for a living. I left trading specifically because of the actions of a hedge fund. In the mid 90's the futures market for NG was thin, not a tremendous amount traded. We were in August which is a weird time for gas. A/C's are running but no one is heating anything so gas prices are driven by how much is going into storage and how much space is left to store gas for the coming winter. Storage was full, and fundamentally the price should have been dropping. Lots of traders going short and gonna buy after the price drops. Problem is price don't drop. A hedge fund was propping up the market and driving the market up against the fundamentals. They made a ton of money at the expense of numerous companies who actually supplied the market the physical product.
Yeah sad story and I know most don't care but the moral of the current story is that these hedge funds, the richest of the rich have made billions and that was just the way it was. Understand that the big trading houses and investment banks, the same ones that benefited from government bailouts have done this for years. The first time the small investors cost them substantial loses it is headline news, the stock is suspended from trading and the government and the SEC want to launch investigations. Bottom line only a wealthy few can rule the market and most Americans get screwed in the process.
Finally when looking at stock value it is always interesting to look at the annual reports of companies and where you can understand the top folks compensation packages. For years their incentives have been tied to stock price. Decisions are made to shore up the price. No one builds for the future, the liquidate profitable assets, they make stupid moves all in the name of stock price to make executive compensation as high as they can. I worked at Enron for 7 years. I know what caused them to blow up. I can tell you it was promises made to the analyst community that earnings would increase 20% annually and when that number which drove executive compensation faltered is when they played the games that eventually bankrupt the company and cost me personally a large portion of my retirement dollars. They were desperate to pump the price because that's how they got paid.
Bitter, sure I have taken my lumps but believe me I celebrate a hedge fund taking it in the nose. Don't worry the fund that lost the money is run by a protégée of the guy who just bought the New York Mets. The guy pumped $2.75 billion into the fund to shore it up. So the rich get richer and the rest of us stay where we are. All we ask for is a level playing field but between the funds and the government we won't ever get that.
