where does the money go when markets are down?

Question

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

Answer 1

So the answer is you don’t actually “lose” anything until you sell the stock. You traded 100 bucks for a stock. Later the goal is to find someone who will buy the stock for more. On paper you lose money when the value goes down. It’s a lot like buying gold for instance. For some reason people understand gold easier. Say you buy an ounce for 100 bucks (I know not even close to the actual price but not the point). You now have an ounce of gold. You have that gold until you sell it. If say golds value drops to 90 bucks an ounce you can only get about 90 back by selling it to someone willing to buy it. If it shot up to 1000 an ounce you still didn’t truly make more cash until you sell it for cash. I think the reason it’s easier to understand gold instead of stocks even though it’s the exact same explanation is that people can visualize having some amount of gold but owning a stock feels more abstract.

By the way this is the same wealth for the most part that people like Bezos makes. Ya he made billions and billions in wealth but it’s only because the value of Amazon stock went up and he’s just been holding on to it instead of selling it. He never made cash from it (which doesn’t stop him from using it as collateral but that’s an entirely different complicated story about how rich people can have their cake and eat it too thanks just having that much enables banks to blah blah blah long story).