How do stocks work and how do both sides (company and buyer)benefit from it?
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Stock is just a percentage ownership of a company. This ownership entitles you to certain rights, typically a share of the revenue (in the form of dividends when they are issued) and votes for the board of directors (the group that makes the really big decisions, like hiring the CEO) or other major issues (like sale of the company entirely).
The company benefits only when they issue new stock. They sell additional ownership in the company in exchange for an influx of cash, which can be used to fund new ventures or operations. Subsequent sales of issued stock don’t benefit the company at all. Individuals benefit because by buying shares, the get the rights I mentioned in my first paragraph.
Subsequent sales follow the same rule, but instead of the company, you substitute the current owner of the stock. When they sell the share, they get cash _now_, and the buyer gets the ownership with all the benefits this entails.
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