What’s the opposite of stonks?
Shares of technology companies are sharply lower in the United States today, with the tech-heavy Nasdaq Composite falling 2.4% in early-afternoon trading.
Inside of the larger tech industry, things are even worse. The WisdomTree Cloud Computing Fund, essentially a way to trade the Bessemer Cloud Index as an aggregate, is off some 5%. The Bessemer Cloud Index tracks a basket of public software companies, which provide their services largely through hosted (SaaS) or on-demand (API) methods.
TechCrunch doesn’t bring you intraday trading updates much, but because these come on the heels of larger declines, the damage is starting to pile up.
The Nasdaq is off 7.7% from its recent highs. That’s not that bad. It’s not even a technical correction, a movement that requires a 10% decline from recent highs. A bear market, as a reminder, is a 20% correction from recent highs.
The SaaS and cloud market is in the worst shape, falling nearly 13% as of today’s declines. Public software companies are in a correction and are on their way toward a bear market if any more days like today crop up.
There’s more afoot, of course. Shares of social giant Facebook are off a little more than 5% after the company endured — even for it — a punishing news cycle in recent weeks. A whistleblower who leaked internal Facebook material came forward over the weekend, leading to another round of coverage that Facebook would like to forget.
Then, today, Facebook’s entire suite of services — Facebook, Messenger, Instagram, WhatsApp — went down due to an issue with its servers.
Shares of Facebook are off about 15.5% from recent highs, putting Zuckerberg’s empire in even worse shape than SaaS. This is despite a bullish advertising market.
All told, this is not the way that the stock market would have wanted to kick off its first full trading week of Q4. And because we’re expecting a few more IPOs before the end of 2021, it’s an ominous kickoff to the final public-offering push of the year.