Seeking Alpha

Tech momentum plays dive again

  • Though the Nasdaq is only down 0.1%, many 2013 Internet, solar, and enterprise software high-flyers are diving once more. Chinese names are well-represented in the group, as NQ Mobile continues crashing thanks to fraud allegations and Sohu plunges due to weak Q4 EPS guidance.
  • The WSJ and NYT have each run pieces asking whether a new tech bubble is afoot, at least in certain hot sectors. "People are reaching for growth," says one fund manager quoted by the WSJ. Others argue the fact the high-flyers generally have substantial revenue, and are often profitable, makes the current situation different from the Dot.com bubble.
  • Internet decliners: FB -3.4%. MELI -2.8%. GRPN -5%. ZNGA -2.7%. P -2.4%. DANG -7.6%. VIPS -7%. YY -4.8%. QIHU -5.6%. RENN -5.7%. SINA -2.4%. FUEL -4%.
  • Solar decliners: JKS -12.4%. FSLR -4.8%. SOL -8.4%. YGE -8%. JASO -6.9%. GTAT -5.4%. SUNE -4.6%. SPWR -4.3%. SCTY -3.8%. STP -8.9%. TSL -13.2%.
  • Enterprise decliners: CRM -3.8%. DATA -4.5%. MKTO -5.8%. WDAY -4%. DWRE -3.4%. VEEV -5.1%. IMPV -3.4%.
  • Recent declines: I, II.
  • Previous: Cashin sees mobile/cloud bubble
Comments (5)
  • I hate these dumb articles about bubbles. There is nothing that shows lack of intelligence like bloviating on general issues without knowing the details of specific companies. Every company has its own financials, prospects etc. Yes, it is certain that some tech names are overvalued. Some are still undervalued despite going up in price.

     

    It is momentum traders that cannot tell one firm from another and go in and out the whole sector that are causing us trouble. Those momentum traders will probably lose their shirt because they are bidding up companies that are hopeless and/or absolute scams. But of course once they start losing they will move out of the entire sector and cause losses for the valuable companies too.
    28 Oct 2013, 12:33 PM Reply Like
  • Those "momentum traders" will also cause losses for those individuals that believed in the companies that appeared to have value by buying their stock in hopes of a positive return.
    28 Oct 2013, 01:10 PM Reply Like
  • So why is FB down? Sine it's profitable ? Earning haven't come out yet
    28 Oct 2013, 12:58 PM Reply Like
  • momentum trading creates opportunities for value minded investors, i say let them lose their shirts! GTAT isnt a momo, it was just severely undervalued at 2.60 a share and at 8 still represents opportunity for long term investors.
    28 Oct 2013, 05:42 PM Reply Like
  • because of a few chinese stocks that were labeled ¨¨ fraud accounting¨¨ both solar and internet stocks took a BIG hit !! why SCTY? why SUNE?? why FB ??... why fundamentals not are in play...its like mixing apples and oranges...
    29 Oct 2013, 10:23 AM Reply Like
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