Stock Price Charts

When "Bad News is Already Factored In.." to a stock share?

Can someone explain this to me? When you hear that an interesting stock share already has the "bad news" bulit into it what does this tell you about that stock?

Public Comments

1. That tells me that the price of that stock should have bottomed. But it does not mean the price cannot go lower or much lower in some cases.
2. As an example, if everyone knows that retail sales are going to drop big over the next quarter then stock prices react as soon as the information becomes available becoming factored into the stock price. An investor would NOT wait until the actual information came out at the end of the quarter.