[nomadking]

The inital price will have been based on worth of business. After that the share price will be affected by people treating the shares as a easy way of making money and not a longer term investment. X will buy shares based on what the buyer Y thinks buyer Z will pay for them. This increase the share price. Same thing happens with house prices. People buy a house expecting to make an easy profit in a years time from somebody else who will in turn hope to make an easy profit in another years time.