[m10i]

> Before "somebody" lost their job and sold their stock, there were X people holding Y dollars. Afterwards, there are still X people holding Y dollars

Maybe it's better to think of it as X-1 people holding Y+1 dollars :P

But really, I think the above poster answered your question with this bit:

> This adds downward pressure on the market since people must sell

Prices go up when you bid higher than the current price for something, and conversely they go down when you bid lower than the current price.

When someone sells in these situations, it means the current average price has dropped.

Also sometimes, when people are desperate to sell, they can really lowball the value of something causing its overall value to depreciate significantly.