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The people who held all the stock have lost a combined 650B since that date. It may be a better investment now - but 650B was literally lost by these folks.

quickthrower2 4y ago
Not really. There was no 650B in cash. If they all tried to exit at the top they wouldn’t all have been able to do it.
- garbagetime 4y ago
  How do you know that?
  - Cupertino95014 4y ago
    Picture 10 elephants trying to get through a 4-foot doorway, all at once. If the volume of sell orders gets too high, the exchange shuts down trading in that stock. If it's high but not "too high" then the price they all get will be significantly less than what they expected.
    - garbagetime 4y ago
      > If it's high but not "too high" then the price they all get will be significantly less than what they expected. My question is: how do you know that?
      - Cupertino95014 4y ago
        A sell order has to match a buy order. Apparently, on the 27th, a huge number of people wanted to sell 232,316,600 shares when it was 129. There weren't that many buyers at that price, so they got out somewhere between 129 and 97. Date Open High Low Close* Adj Close* Volume Oct 28, 2022 99.58 100.85 97.51 99.20 99.20 95,728,200 Oct 27, 2022 97.98 102.50 96.38 97.94 97.94 232,316,600 Oct 26, 2022 131.68 135.55 128.53 129.82 129.82 82,791,500 Oct 25, 2022 130.88 138.35 130.59 137.51 137.51 38,433,200
  - SturgeonsLaw 4y ago
    There has to be another party on the other side of every trade. If someone wants to sell Meta stock for $300, there needs to be someone who wants to buy it for $300. Exchanges have a collection of their participant's bids ("I will buy for this price") and offers ("I will sell for this price"). When a bid is matched with an offer, the transaction goes through. Now this is the important part - there are only so many people willing to buy for $300. If there is a mass sell off, all those offers are consumed, and the exchange starts filling the offers of people who would buy for $299.99 (or whatever the next lowest price is). Once those offers are consumed, further down the price ladder we go. That alone will ensure that not all sellers are getting top dollar, however a market selloff like that would trigger a cascade of lower prices (buyers withdrawing their bids and relisting at a lower price, or not relisting at all), along with things like stop losses and algorithms getting triggered.
    - garbagetime 4y ago
      What if there are well-funded buyers who think the stock is priced fairly?
      - SturgeonsLaw 4y ago
        That's a different scenario. The previous comment said: > If they all tried to exit at the top Assuming that "they all" means "the vast majority of shareholders", then sell pressure would be higher than buy pressure by definition, and the price would drop. If there was enough buy pressure to absorb the sell pressure, then we're in a scenario where half or less of the shareholders are trying to exit.
  - quickthrower2 4y ago
    There would not be enough buyers. If there were you would have an absurd situation where there is 650bn chasing the shares at that price based on the same public information that is making the “Other half” want to sell everything at that price. That might be possible with more “rigged” markets like cryptocurrency shitcoins. But I can’t see it is possible here.
    - garbagetime 4y ago
      I agree that the shareholders would never actually all sell in unison without there being some motivating force for that to happen. But that doesn't seem relevant to the question at hand - whether the $650 billion was "literally lost".
avalys 4y ago
Where did it go?
- fasthands9 4y ago
  It is possible for actual value to be destroyed or lost to other people. If you own an oil well and pay out a ton of employees to try a new extraction method which causes a fire - the actual value of your asset has been destroyed. And a lot of money has also been transferred from investors to employees. The embarrassment may also cause you to lose trust of other companies which hurts the value of future contracts. Some of the value you destroyed is gained by other companies since they can now sell their product for more - but the shareholder value of the well you own is lost. I agree Facebook's value has a speculative element to it - but its pretty clear that the money has been lost because the thing of value has been partially destroyed both by itself and by competitors like Apple and TikTok which is stealing its revenue.
- freen 4y ago
  It never existed. Cash value is realized upon liquidation. Before that, it’s just paper.
  - fasthands9 4y ago
    Would you say that if you own 20% shares of the most popular sushi restaurant in town - and then there was a kitchen fire not covered by insurance and you accidentally poisoned a customer - no value of your investment was destroyed? Of course it was. You can debate how much of it was speculative but even in tech its not all made up.
    - thaumasiotes 4y ago
      But that's not what's being reported here. If you owned 20% of shares of the most popular sushi restaurant in town, and absolutely nothing about the restaurant changed, but its market capitalization went down, would you say that no value was destroyed? It is conventional to describe a loss of value in both cases, but the second kind is much more obviously hypothetical than the first kind.

quickthrower2 4y ago

Not really. There was no 650B in cash. If they all tried to exit at the top they wouldn’t all have been able to do it.

garbagetime 4y ago
How do you know that?
- Cupertino95014 4y ago
  Picture 10 elephants trying to get through a 4-foot doorway, all at once. If the volume of sell orders gets too high, the exchange shuts down trading in that stock. If it's high but not "too high" then the price they all get will be significantly less than what they expected.
  - garbagetime 4y ago
    > If it's high but not "too high" then the price they all get will be significantly less than what they expected. My question is: how do you know that?
    - Cupertino95014 4y ago
      A sell order has to match a buy order. Apparently, on the 27th, a huge number of people wanted to sell 232,316,600 shares when it was 129. There weren't that many buyers at that price, so they got out somewhere between 129 and 97. Date Open High Low Close* Adj Close* Volume Oct 28, 2022 99.58 100.85 97.51 99.20 99.20 95,728,200 Oct 27, 2022 97.98 102.50 96.38 97.94 97.94 232,316,600 Oct 26, 2022 131.68 135.55 128.53 129.82 129.82 82,791,500 Oct 25, 2022 130.88 138.35 130.59 137.51 137.51 38,433,200
- SturgeonsLaw 4y ago
  There has to be another party on the other side of every trade. If someone wants to sell Meta stock for $300, there needs to be someone who wants to buy it for $300. Exchanges have a collection of their participant's bids ("I will buy for this price") and offers ("I will sell for this price"). When a bid is matched with an offer, the transaction goes through. Now this is the important part - there are only so many people willing to buy for $300. If there is a mass sell off, all those offers are consumed, and the exchange starts filling the offers of people who would buy for $299.99 (or whatever the next lowest price is). Once those offers are consumed, further down the price ladder we go. That alone will ensure that not all sellers are getting top dollar, however a market selloff like that would trigger a cascade of lower prices (buyers withdrawing their bids and relisting at a lower price, or not relisting at all), along with things like stop losses and algorithms getting triggered.
  - garbagetime 4y ago
    What if there are well-funded buyers who think the stock is priced fairly?
    - SturgeonsLaw 4y ago
      That's a different scenario. The previous comment said: > If they all tried to exit at the top Assuming that "they all" means "the vast majority of shareholders", then sell pressure would be higher than buy pressure by definition, and the price would drop. If there was enough buy pressure to absorb the sell pressure, then we're in a scenario where half or less of the shareholders are trying to exit.
- quickthrower2 4y ago
  There would not be enough buyers. If there were you would have an absurd situation where there is 650bn chasing the shares at that price based on the same public information that is making the “Other half” want to sell everything at that price. That might be possible with more “rigged” markets like cryptocurrency shitcoins. But I can’t see it is possible here.
  - garbagetime 4y ago
    I agree that the shareholders would never actually all sell in unison without there being some motivating force for that to happen. But that doesn't seem relevant to the question at hand - whether the $650 billion was "literally lost".

avalys 4y ago

Where did it go?

fasthands9 4y ago
It is possible for actual value to be destroyed or lost to other people. If you own an oil well and pay out a ton of employees to try a new extraction method which causes a fire - the actual value of your asset has been destroyed. And a lot of money has also been transferred from investors to employees. The embarrassment may also cause you to lose trust of other companies which hurts the value of future contracts. Some of the value you destroyed is gained by other companies since they can now sell their product for more - but the shareholder value of the well you own is lost. I agree Facebook's value has a speculative element to it - but its pretty clear that the money has been lost because the thing of value has been partially destroyed both by itself and by competitors like Apple and TikTok which is stealing its revenue.
freen 4y ago
It never existed. Cash value is realized upon liquidation. Before that, it’s just paper.
- fasthands9 4y ago
  Would you say that if you own 20% shares of the most popular sushi restaurant in town - and then there was a kitchen fire not covered by insurance and you accidentally poisoned a customer - no value of your investment was destroyed? Of course it was. You can debate how much of it was speculative but even in tech its not all made up.
  - thaumasiotes 4y ago
    But that's not what's being reported here. If you owned 20% of shares of the most popular sushi restaurant in town, and absolutely nothing about the restaurant changed, but its market capitalization went down, would you say that no value was destroyed? It is conventional to describe a loss of value in both cases, but the second kind is much more obviously hypothetical than the first kind.