When a stock price goes down, is it that many people have sold and now have that value in cash OR is it that the market just decides the stock price is now worth less collectively?

Question

When a stock price goes down, is it that many people have sold and now have that value in cash OR is it that the market just decides the stock price is now worth less collectively?

In: 103

Answer 1

“The market” is the result of peoples’ decisions. It does not exist as an independent entity.

So: “many people selling” and “the market decides the stock is worth less” are just two different ways to say the same thing.