I'll give you a chart to contemplate on- in Sept 2022, after CHN's big plunge, bottom pickers/bargain hunters swooped in to buy/invest believing it was a great entry point, it was but only for 7 months, but more likely believing that they bought it cheap they could hold so when the next large decline came, they ignored it and rode all the way down. No one could imagine that a near $10 CHN could crash all the way back to under $1. CHN was virtually a cult stock (like LTR), great management (same as LTR), and led to Julimar PGE nearology craze back then.
Fact is market participants look at the price and thought $1 or $2 is cheap compared to $10, what is not to like a stock that has fallen -80%, right? But they ought to instead judge based on the stock's market cap and its valuation relative to what it could deliver in the near term.
Stocks fall when their market cap valuation can no longer be justified based on forward outlook and sectoral market conditions. A nice plant, a great management, an environmental compliant product can be all good but they don't matter when valuation is out of sync with perceived and projected forward free cash flows.
