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Why tech giants slipped like everyone else

August 27, 2015

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(Via user Duncan Rawlinson)

Technology stocks in companies like Google, Apple, Netflix, Facebook and Amazon took a beating on Monday, along with the rest of the global market.

But unlike other sectors of the economy, like energy, which has been extremely weak for a long time now, those tech companies are doing better than ever.

So why did their stock prices drop with everyone else?

Marketplace on NPR stations covered this topic earlier in the week, and explained that those tech giants essentially got caught in the wave.

By the closing bell on Tuesday, as the radio show’s Molly Wood explains, almost all of those big name tech companies had regained most of their losses.

So, if you were looking to buy stocks in Google and Apple on the cheap, you probably missed your chance until global markets take another nosedive.

However, Farhad Manjoo of the New York Times has a great article on why bursting Silicon Valley’s bubble could be a good thing for the booming startup world.

It turns out that many venture capital firms, the people who fund all of those revolutionary app ideas, believe that the tech industry is too crowded right now.

A downturn, some of them say, would separate the serious players — the companies who are in it for the long haul — from the pretenders.

“In good times, in other words, it’s relatively easy to be a great start-up chief executive,” Manjoo writes. “When winter comes to Silicon Valley, we’ll find out which founders really shine. A lot of them won’t. Things won’t be pretty. But maybe it’s time.”

For story ideas, reach out to local technology companies and see if they’ve been affected by this week’s downturn.

Then, ask them how they’d manage if the current tech boom busts. Are any of their employees expendable? What kinds of jobs are essential to their operations?

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