system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: when the stock market "crashes" and everyone loses their money, where does that money go?
gpt
Stocks are pieces of ownership in a business.  If you had a lemonade stand, and were the only person who built and ran it, you wouldn't need "stock" in the company, you would be the sole owner.  But say you have an idea for an awesome lemonade stand, but you don't have the money to build and stock it.  You can go to your friend who has the money and borrow it from him/her to build the stand.  Of course, your friend might want to share in the profits of the business instead of just collecting interest on the money, so you can agree that you and your friend have ownership in the stand, and will split the profits based on the percentage of the business that you each own.

Now, you don't necessarily have "stock" yet, just a partnership.  Now, if your friend wants to sell his share of the business to someone else, stock is the easiest way to handle that.  You would divide up the ownership of the stand, say 60% yours, 40% your friend's, into 6 shares of stock for you and 4 shares for your friend.  Your friend could then sell those 4 shares to someone else, and "cash out" of the business.

The stock market is just a public exchange where people buy and sell stock.  The "money" people are losing in a stock market crash isn't really money, it's wealth.  They paid money for a stock, and that money went to another person who was selling the stock.  They now have no money.  They only have stock.  It's worth money, but it's not real money.

Now, when they "lose money," it's because that phrase describes the amount of wealth someone has in stock based on what the stock would sell for in dollars.  As the market crashes, the selling price of the stocks goes lower and lower, so people's wealth is dropping.  People haven't lost anything until they sell the stock, since they have exactly what they had to begin with, the same number of shares of stock.

So, the money never goes anywhere except to another person buying/selling the stock.  That's why the stock market is called a "zero sum game,"  because if someone buys low, then sells high, and the person who buys low sells high, overall the amount of money trading hands has stayed the same, because the amount the low/high guy made is negated by the amount the high/low guy lost.