Offer your thoughts or opinion on the input financial query or topic using your financial background.

Why do stock prices of retailers not surge during the holidays?
I used to be in research department for big financial data company.   Tell your son that there are three factors: Most people think that net sales vs. expectations is the only factor.  It might not even be the biggest.  It is simply how much money did company make.  Note that this is not how many units they sold.  For most companies they will have adjustable pricing and incentives in their sector.  For example let's talk about a new company selling Superman Kid's Bikes (with a cape the flips out when you hit a certain speed).  The company has it in Walmart at one price, Target at another, Toys R' Us even cheaper, Amazon (making more profit there), and other stores.  They are doing "OK" come Dec. 1 but holiday season being half way over they slash price from $100 to $80 because they have tons of inventory.  What are looking at her is how much money did they make.  Note that marketing, advertising, legal (setting up contracts) are a bit fixed. In my opinion consumer sentiment is the #1 thing for a company that sells a product.  Incredible consumer sentiment is like millions of dollars in free advertising.  So let's say Dec. 15th comes and the reviews on the Superman Bike are through the roof.  Every loves it, no major defects.  Company can't even supply the retailers now because after slashing the price it became a great buy.  A common investor might be pissed that some dummy at the company slashed the prices so they could have had a much better profit margin, but at the same time it wouldn't have led to an onslaught of sales and consumer sentiment. And the last area is product sell-off.  This doesn't apply to all product but most.  Some products will only have a technology shelf life, some will actually go bad or out of fashion, and even selling Superman bikes you want to get those to the store because the product is so big.  So ignoring making a profit can a company sell off inventory at or around cost.  If they can't, even if they made a profit, their risk factor goes up. So let's get back to Superman Bikes.  This is the only product company ABC has.  They had expected holiday sales at 100 million and profits at 40 million.  They ended up at 120 million and 44 million.   Let's say their stock was $20 before any information was gathered by the public (remember for most companies info is gathered daily now so this is rather simplistic).  So you might expect that the stock would rise to maybe $24 - to which if you were an investor is a great profit. However this company has a cult consumer following who are waiting for the Captain America Bike (shoots discs) and the Hulk Bike (turns green when you go fast).  Let's say consumer sentiment and projections base off that put next holiday sales at $250 million.  So maybe the company is worth $40 a share now.  But consumer sentiment is funny because not only does it effect future projections but it also effects perceived present value of company - which may have the stock trading at $60 a share (think earnings and companies like Google).  Having a company people feel proud owning or thinking is cool is also a indicator or share worth. I gave you a really good example of a very successful company selling Superman Bikes... There are just as many companies that have the opposite happening.  Imagine missing sales goals by a few million with bad consumer feedback and all of a sudden your company goes from $20 to $5 a share.