Simplistic answer is that equity holders sold and turned some of their equity into cash.

Slightly more nuanced answer is that when people tried to sell, they couldn’t get as much as they wanted (paper value of the equity) so accepted a lower price.

Eli5: I have two gumballs that I paid $10 each for. They’re “worth” $20 combined. I go to sell one but no one will give me $10, i have to accept $6 instead. Now that’s the “worth” of each gumball. Two gumballs now are $12. Price discovery means that all gumballs lost 40% of value™