The market is frequently irrational. Short squeezes, news cycles, macro economic events, etc can cause a stock to diverge from a reasonable calculation of its discounted future earnings. In short, the efficient market hypothesis is incorrect. It's why value investors like Warren Buffett have been able to get rich buying underpriced stocks. It isn't all that unusual for stocks to double or halve during the course of a year. Acknowledging this is why Berkshire is authorized to buy back stock only up to a certain multiple of book value. More companies should follow suit.