I've been trading in the sharemarket for a fair while, but I've never really got my head around this nor did it really matter to me.
When I buy shares, I'm effectively buying a slice of the company. Does this money go directly to the company? E.g. if I buy $1000 worth of shares in company XYZ, they get the $1000?
What happens to the $1000 if the XYZ's share price goes down 50%? Does it disappear? Does the company still have the $1000 sitting on their balance sheet, or is it marked down to $500 based on their share price.