Market Failure of Facebook, Apple and Others Points to a Looming Tech Bubble 2.0
SputnikNews.com
13.06.2017
FAANG – the stockmarket acronym applied to Facebook, Amazon, Apple, Netflix and Google – have endured a violent ride on international markets since June 9. In what cannot be a coincidence, the quintet all fell concurrently – albeit to varying degrees – raising questions over whether a repeat of the dotcom bubble is potentially in the offing.
FAANG’s precipitous decline commenced the morning of June 9 the second markets reopened, with all five sliding synchronously. In some cases the falls were historically savage — Netflix had fallen by nine percent by close of trading on Monday (June 12), while Apple was down over six percent. While initially investors were anxious their simultaneous slide may be symptomatic of a wider market correction, by the end of the day it was clear the drop was restricted largely to these stocks — producing fresh panic about the viability of the tech sector.
While it’s arguable their sudden decline was partially inspired by a market note released by Goldman Sachs the day prior, which suggested investors were overly reliant on the group for growth, the tech sector’s fortunes have more generally declined since FAANG’s flop — despite there being no tangible developments to explain the fall. For example, the NASDAQ 100, a stock market index dominated by tech firms, has been falling as a whole ever since Friday (June 9) too. Moreover, the market note made a potentially troubling historic comparison.
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