The stock markets closed for the week on Friday after another punishing day of trading for some of the biggest technology firms in the United States. The Dow Jones Industrial Average was down nearly 1,000 points and the S&P 500 lost more than 3%. Both indexes posted significant losses for April.
Big Tech stocks suffered the most, with the tech-heavy Nasdaq closing more than 4% on Friday, falling by 10% over the course of April. This represents the worst month for Nasdaq stocks since 2008.
But the declining fortunes of technology stocks is nothing new, with considerable losses across the board since the sector reached a peak in November 2021. The shift away from the pandemic’s ‘virtual reality’ has lessened the emphasis on technological solutions and the markets appear to be adjusting accordingly.
Technology companies plummet on the stock market
On 19 November 2021 the Nasdaq stock exchange reached a record high, fuelled in large part by the rapid growth of tech companies like Netflix and Facebook, now Meta Platforms, in recent years. Both companies had become increasingly embedded in the fabric of American society, and the pandemic’s disruption of normal life meant that virtual entertainment and communication platforms became vitally important.
However since that peak in late 2021 the value of both Netflix and Facebook have regressed massively. Shares in the streaming platform are down nearly 68% in that time, while Meta Platforms has slumped by 45%.
The situation for Netflix appears particularly difficult with shares falling by 35% in a single day on Wednesday after the company announced that it was losing subscribers for the first time in more than a decade. Prospective investors may be tempted by the current low prices, but Netflix has reported that it expects to lose another two million more subscribers before the end of this quarter.
Tesla stocks slump amid Elon Musk uncertainty
The biggest financial news of 2022 so far could well be the proposed takeover of Twitter by Tesla CEO Elon Musk. After first revealing himself as a major share-holder in April, Musk has launched a bid to purchase the social media giant.
As part of the bid, Musk has promised to provide $21 billion in cash to fund the deal, alongside substantial loans. If he were to have the bid accepted he would likely need to sell some of his shares in Tesla to produce the cash needed for the purchase.
A spell of selling from the company’s CEO would undoubtedly degrade the value of Tesla stocks, and has actually done so already. News of Musk’s bid for Twitter was followed by a swift drop in the price of Tesla stock, falling by more than 12%.
Edward Moya, a senior market analyst at OANDA, added: “Tesla investors are worried that Musk might spend too much time trying to fix the social media giant’s problems, and that will take away his laser-like focus in winning the electric vehicle race.”