Isn’t all of the stock owned by individuals?
Not usually. A company can issue stock, but never sell it. This is called “Treasury Stock”. Further if the company doesn’t have any Treasury Stock, they can choose to issue new rounds of stock diluting the per share value of existing shares. The good reasons to do this is to raise capital needed for new investments by the company. Alternatively the company could issue a “stock split” which creates double amount of shares as a way to intentionally cut the value per share in half (doubling the amount of share in the company).
However, none of these are a good thing to do for an employee (Musk) because they sold too much of their own pile of stock to buy a failing social media company.
Yes to your first question. This is why, when a company issues new stock (that isn’t a split) the value of all the shares usually falls by a greater level than just the value issued. For publicly traded companies the leaders of the company have to act in the interests of shareholders. So if they tried to steel away the company by diluting stock, or enriching themselves, they would be in breech of their fiduciary responsibilities. There are legal consequences for that.
For privately held companies (not publicly traded), this is a common trope/scam for small companies. There are far fewer protections for private shareholders.
