Folks, it's 2000 (or 2008) all over again.

[Greyson F]

All the stock price of a company is, by definition, is "The NET PRESENT VALUE of all expected future cash flows from dividends of that company" (In Finance, capital gains technically don't account for the stock's value).

With that being said, anytime the value of a stock lowers, all that is lowering is the EXPECTED value that the stock will yield in the future.

In accounting, a stock is written on the books at par, and any excess in Stock price is booked as "in excess of par". The value is neglible to the company, because all of the value it loses is "equity in excess of par", which is just added market value to the book value of a stock.

Generally, in public markets, a company's money is already made once the stock is sold to investors. All other changes of value goes between the trades of investors, because the stocks are now in the secondary markets, where investors seek to capitalize on the stock's NPV.

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[jon.a]

It would have been transferred probably not to one person, because that would mean he traded a really big order size. It would have been transferred to several other traders who were short. Could be 100 or 1000.

Again, it's a zero sum game.

Investing in the market is a "positive sum game."
Trading in the market can be a "zero sum game."

 

[aespinosa]

Investing in the market is a "positive sum game."
Trading in the market can be a "zero sum game."

Correct!

So in the end the money is not wiped out from the market. You lost with investing which is not zero sum, but in the same market environment you can win in every situation