What has happened to Tech Stocks?
Unless you’re living under a rock for the past month, you probably know that the world stock market is crashing hard, but how does the volatility of this current economy effect the tech stocks this week?
Up until recently, tech stocks were pretty well protected. However, as of a few days ago, stock investors began ducking away from everything, tech stocks included. Where are they pushing their money into? Safe investments like treasuries.
This is bad news for several tech companies like Yelp, Twitter, Zynga, or Groupon who are all big timer IPOs now or planning on becoming IPOs in the near future. I wouldn’t be surprised if some of them are reconsidering after seeing the recent downward trend tech stocks have taken this week.
Tech Stocks This Week – What Happened?
As you may know the major factor that effects tech stocks (or any stock for that matter) is investor confidence, and with the recent worries of the growing debt in European countries and the US, tech stocks have felt the punch with the tech heavy Nasdaq Composite Index dropping 9% this week.
Here’s what Janco Partner’s analyst Mike Hickey told VentureBeat about tech stocks:
“A technical break on the Nasdaq would suggest further downside than upside,” Janco Partners analyst Mike Hickey told VentureBeat. “The fear is that we’re approaching a recessionary environment. The consumer is less optimistic on the future. That can hurt discretionary items like games.”
Tech Stocks This Week | Options
Here’s what VentureBeat had to say about options as of late:
“The Standard & Poor’s 500 Index fell 4 percent on Thursday, and the week’s sell-off wiped out about $3.5 trillion of market value by the end of trading on Friday. The broad sell-off ignited further fears of a double-dip recession as investors fled equities and scrambled to lock in definitive returns on investments — sending options activity to record levels for the year.” http://venturebeat.com/2011/08/05/nasdaq-trading-bloodbath/
Tech Stocks This Week | Recent IPOs
Like I predicted earlier, major tech stocks that would have been opened to the public may be considering a run for the hills with the recent scare. For example Groupon and Zynga were planning on opening their doors to the public and raising tons of money by becoming an IPO, but ts major hurdle may have been an earthquake strong enough to rock those plans.
We know how well LinkedIn’s recent IPO move went; it was one of the most successful tech stocks of the year, but it has even seen more than a $1 billion loss in a mere two days. However its still doing better than it expected when it went public. This is also true for Pandora’s tech stocks that rose in values by the end of the treacherous week. ” The company opened trading at $13.19 a share on Thursday, and ended that day at $13.56. It ended trading Friday at $13.48. That company is listed on the New York Stock Exchange, where trading was a little more steady.”
And a lot of the falls in tech stocks aren’t as severe as in other areas, for example Apple and Microsoft were both only down about 1% after the week was over.
Tech Stocks This Week | So What Do We Do?
Well tech stocks still aren’t being hit as hard as other stocks, because its the largest going industry out there, so even with low investor confidence, I’m convinced that if you want to be in any industry its technology. However, your investments are up to you. What’s an even better market? The social market of course.