Meta executes major layoffs as worries grow over another dot-com crash
SIMONE DEL ROSARIO: TECH STOCKS HAVE HAD A TERRIBLE, HORRIBLE, NO GOOD, VERY BAD, YEAH, YEAR WILL DO. LIKE META – DOWN MORE THAN 70% IN 2022. AND THESE BIG NAMES, ALSO SHEDDING SERIOUS WEIGHT.
IN FACT, SEVEN OF THE BIGGEST NAMES IN TECH HAVE LOST A COMBINED 3 TRILLION IN VALUE THIS PAST YEAR, BEGGING THE QUESTION: IS THIS THE DOT-COM BUST ALL OVER AGAIN?
THE DOT COM BUBBLE IS THE INTERNET BOOM BETWEEN ‘95 AND 2000, DURING WHICH THE TECH HEAVY NASDAQ INDEX GREW FIVE FOLD.
BUT THE SUBSEQUENT CRASH SENT THE NASDAQ DOWN NEARLY 80%. MOST TECH STOCKS WENT BUST. AND IT TOOK THE NASDAQ 15 YEARS TO REACH ITS FORMER HEIGHT AGAIN.
DAN IVES: the dot com bubble, it was all about the hype.
SIMONE DEL ROSARIO: DAN IVES HAS BEEN A TECH ANALYST FOR DECADES.
AND REMEMBERS THE DOT COM BUBBLE BEING FUELED BY SPECULATION ABOUT THE INTERNET AND EASY MONEY, UNTIL CAPITAL DRIED UP.
DAN IVES: I think there are similarities. I mean, in terms of easy access to capital hype train valuations that continue to increase.
SIMONE DEL ROSARIO: BUT THAT’S WHERE HE SAYS THE SIMILARITIES STOP.
DAN IVES: I think now, you’re clearly seeing a very difficult time for tech stocks. But I think the fundamentals are just a total different place then they were going back to the dot com bubble and burst.
SIMONE DEL ROSARIO: FOR ONE, THE BIG TECH STOCKS NOW TURN MAJOR PROFITS. AND ARE WAY MORE INGRAINED IN OUR EVERYDAY LIVES.
AND WHILE THE PANDEMIC BOOM BLOATED VALUES, IT’S NOT BY NEAR AS MUCH AS IT WAS DURING THE DOT COM BUBBLE.
BUT THAT DOESN’T MEAN THESE COMPANIES ARE IMMUNE TO PAIN.
DAN IVES: layoffs, that’s already starting to take place, I think if you look in Silicon Valley in general, I mean, a lot of these companies were spending like 1980s rock stars. So you’re seeing that now start to come off pretty significantly, for the first time and call it 13 years.
SIMONE DEL ROSARIO: AND AS CAPITAL DRIES UP, IVES SEES A LOT OF CONSOLIDATION COMING UP IN TECH, WHERE BIG NAMES WITH BIGGER CASH FLOWS GOBBLE UP WEAKER COMPANIES.
DAN IVES: I think it’s a white knuckle period for tech investors. We’re going through what’s really a Fed, macro-driven market. You know, tech investors have been caught in the middle. And many view it as, is it a huge opportunity? Or is it a ‘99-2000 situation?
SIMONE DEL ROSARIO: SOME THINK IT WILL TAKE YEARS FOR THE TECH SECTOR TO RECOVER. BUT MANY ANALYSTS HAVE NEXT YEAR CIRCLED ON THEIR CALENDAR.
DAN IVES: I think, as we go into 2023, we’re going to look at ‘22 more as just a brutal blip.
SIMONE DEL ROSARIO: NOT A BUST – BUT A BLIP. FOR JUST BUSINESS I’M SIMONE DEL ROSARIO.