what causes stock prices to drop
Stock prices can drop for various reasons, and sometimes the decline is caused by a combination of factors. Those can include newly released earnings reports, negative company news, and changes in implicit value, explicit value and supply and demand for the stock.
Changes in the implicit value of a stock can cause it to drop dramatically in price because it is intangible. Basically, it is investors' perceived value of the stock. If investors perceive a company to be in financial trouble, whether it is or not, it decreases the implicit value of the stock.