Data On The Recent Stockmarket Downdraft
Some data on the recent stock market downdraft, assembled by my partner @skupor.
For the seven top consumer tech stocks (FB, TWTR, ZU, TSLA, LNKD, P, YELP): the median is off -37.4% from highs. For four of the top enterprise tech stocks (WDAY, SPLK, FEYE, NOW): the median is off 42.0% from highs. NASDAQ overall is off -8.5% from its high. Google is off -12.4% from its high; Netflix is off -27.8% from its high. Tech IPOs in 2014 so far; the median is off -22.0% from high but up 0.3% from the offering price (equals effectively flat to offering price).
People who want to see a tech bubble look at this data and say, “See! I told you it was a bubble, and now it’s crashing.” People who don’t want to see a tech bubble look at this data and say, “See! I told you it’s not a bubble; the market mostly still hates tech.” One cautionary note: This kind of market behavior with big up and down swings often correlates to high short activity.
@pmarca buy on the hate, sell on the love—
Abrahamic (@oakpassrd) April 14, 2014
Its a crash depending on what sides of the market you are on @pmarca With all the VC available now, a real big bubble is 1-2 years away—
Ken Nakagama (@uaflyer) April 14, 2014
When shorts take a big position, stocks fall. When shorts liquidate, stocks rise. When shorts are squeezed out, stocks really rise. It can be tricky to try to divine where the market wants the price to settle in the middle of a vigorous long/short battle, like arguably now.
@pmarca great points - tech innovation is robust, and as usual the stock mkt is struggling to put appropriate valuations on new companies.—
(@CNBC_critc) April 14, 2014
@pmarca agreed very extreme move without a real change in fundamentals of the companies. def sentiment driven—
Perry Rahbar (@perryrahbar) April 14, 2014