Reason for Sharp decline in Stock Price

This is my first post here. I recently came into stock market and looking for few valuable info.
I see many times stock price go down very sharply. What could be reason for that.

Here is one example (link is pointing to Google Finance):
I cann't post link so removed. It is "Sadbhav Engineering Limited" in Google Finance.

Here you see, price went down very sharply in 2010. What can cause that. I searched for news in that period but could not find any. Please help.

Also, if possible then please reply :
How can avoid falling in that trap?

This should help many investors.

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Originally Posted by satyakaran

This is my first post here. I recently came into stock market and looking for few valuable info.
I see many times stock price go down very sharply. What could be reason for that.

Here is one example (link is pointing to Google Finance):
I cann't post link so removed. It is "Sadbhav Engineering Limited" in Google Finance.

Here you see, price went down very sharply in 2010. What can cause that. I searched for news in that period but could not find any. Please help.

Also, if possible then please reply :
How can avoid falling in that trap?

This should help many investors.

I also noticed such steep falls in many companies, when I see google finance all historic data of a particular company, like sadbhav.

I am not very sure, I am a beginner, but I believe it is because of stock split.

For example a company has 10000 total shares (for simplicity) with price as 100 each each.

When they split the stock say 1:5, each stock is divided into 5 pieces, then single stock price would come to 20 rs.

But now, instead of 10000 total shares, the company will have 50000 total shares each of 20 rs.

In this case, in google finance the stock price will show a sudden drop from 100 to 20 rs.

Someone correct me if I am wrong.