How can a publicly traded company lose billions of dollars in one day and what happens with that money?

Question

E.g., Google lost $100b after its AI made a factual error in a demo.

Or when Musk lost $200b.

What happens with that loss? Do they need to do layoffs specifically because of that? Close massive projects? How can a company continue to even exist after that kind of financial loss?

Thanks!

In: 5

Answer 1

Google didn’t lose a single cent, google shareholders did. Market cap is the price of all its stocks at current price, it’s the theoretical value of a company and it goes up and down however the hypetrain dictates.