On 15 June 2016, shares in CliffCo were trading at $15. Later that day, the company announced that its profits for the six months to 30 June 2016 would be 5% lower than the corresponding period the year before. At the close of trading on 16 June 2016, the price of CliffCo shares had fallen to $12.71 per share, and by 19 June 2016, the price was $11.80 per share. On 3 November 2016, the price was $9.40 per share. How could CliffCo shares suddenly be worth 15% less after their announcement in June 2016?
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