There was a tech bubble; it burst in 2000. The recent crash in the stock prices of FAANG — Facebook, Amazon, Apple, Netflix and Google (Alphabet) — reminds of the 2000 bubble burst, some market watchers have observed. So what is happening? Why are these stocks falling?
First of all, see the massive crash in stock prices of FAANG in just one chart by VisualCapitalist, shared by Lakshmi Iyer of Kotak Mutual Funds.
Pic(k) of the day
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What goes up, must come down ! pic.twitter.com/NBCTe9DsId
— Lakshmi Iyer (@Lakshmi1876) November 27, 2018
The share prices of FAANG have started plunging late August this year. According to The New York Times, the crash led to wiping out of $822 billion in market value. The share prices began falling soon after Amazon and Apple topped $1 trillion-mark, and Alphabet flirted with $900 billion.
The total market value of FAANG had reached $3.6 trillion. What shook investors’ confidence were worries over slowing global economic growth, unimpressive earnings in the last two quarters and anticipated regulation of tech companies by the United States government. On top of that, Facebook’s scandal and Apple’s iPhone sales outlook added to woes.
Bloomberg reported that Nomura Global Equity Fund reduced some US tech stocks on concern valuations were getting too high.