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system
when a stock price goes down, does the money just disappears into thin air?
user
at any given time there are buy orders and there are sell orders.  typically there is a little bit of space between the lowest sell order and the highest buy order, this is known as the bid/ask spread.  as an example say person a will sell for $10.10 but person b will only buy at $10.00.  if you have a billion shares outstanding just the space between the bid and ask prices represents $100,000,000 of market cap. now imagine that the ceo is in the news related to some embezzlement investigation.  a number of buyers cancel their orders.  now the highest buy order is $7.  there isn't money involved, that's just the highest offer to buy at the time; but that's a drop from $10 to $7.  that's a change in market cap of $3,000,000,000.  some seller thinks the stock will continue to fall, and some buyer thinks the stock has reached a fair enterprise value at $7 billion ($7 per share).  whether or not the seller lost money depends on where the seller bought the stock.  maybe they bought when it was an ipo for $1.  even at $7 they made $6 per share. value is changing, not money.  though it would be fun, there's no money bonfire at the nyse.
assistant