Example: if I bought $100 share of ABC company and tomorrow it’s $90, I get that I would incur a $10 loss if I tried to sell it, but I don’t understand what happens to the $10 difference ABC company still has from me.
Edit: okay so in this scenario:
1. i bought the share from the issuer
2. there is a downturn and the s&p index is down by 3,000 points
The first people to hear that the market is about to drop went ahead and cashed out their $100 share back from abc, however I was not lucky and my share is now worth $90. Wouldn’t ABC company have my $10? All the companies listed on the index, they get to keep the difference of the value of what the share was yesterday vs. today. Sure, the equity part of ABC company got smaller, but they still keep the $10 difference should everyone come back and cash out their shares?
In: Other
Ok imagine shares are celebrities. I buy Chris Pratt 10 years ago for $20 and sell him today for $20m as he’s skyrocketed in demand. However I bought Kevin Spacey 10 years ago for $8 million but today he’s worth 50¢.
The guy I bought Kevin from has $8m but he’s had millions wiped off his value and is now worth pennies so I have something in my possession that has dropped massively in value.
Nobody has physically taken the difference in money away but the perceived worth has changed.
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