hello can anyone:Explain the mechanism whereby"the financial reports of listed companies have a direct impact on the prices of their shares"

it is obvious that when a company perfomance is better than that of the preceding year, investors tend to react to the figures because it indicates that,the company growing.
let us analyse the outcomes of the results from different  angles.
1, if company profits and turnover/gross earnings/gross premiums rise above the previous year. then prices are expected to react positively to the results.
2,if there is inrease in turnover/grossearnings/gross premiums and decrease in profit after tax investors may react negatively.
3,if there is decrease in the both it is certain that investors will react negatively, otherwise if the company can defend the cause satisfactorily to the investing public.
i think my explanation is explicit enough to answer ur question