If the company earns profits, it gives back the profits to its shareholders by means of dividends. The authority of a person in the company policies and decision-making is proportional to the number of shares he/she owns.
The company's stock prices are dependent on how well the company is doing in the market. The better the company's position in the market - the higher is the number of people who are willing to invest in its stock - and hence higher is the price of the shares.
Well in addition to this crude explanation, there are several other factors, which are instrumental in deciding the rise or fall of share prices. These factors are as follows:
This refers to the number of investors who are interested in buying shares of the company or the number of investors who are already shareholders of the company.
Gross earnings of the company
This refers to the success of the company in terms of its turnover and profit numbers.
This refers to the general image of the company in the market, with regards to its financial position, profits, and also its core values.
General Market Sentiment
This refers to the general trends in the market, which can hamper or enhance the company's position.
Overall condition of the U.S. and world economies
The world economies including the US economy are all inter-dependent on each other in some way and hence, have an effect on the share pricing.