The five most valuable tech companies lost a combined $321.6 billion from their market caps on Monday — the worst day for US stocks since the 2008 financial crisis, CNBC reports .
In fact, not a single tech stock featured in the S&P 500 finished the day in the green. Apple lost the most of the top five, down 7.9%. Amazon’s share price dropped by 5.3%, while Alphabet, Facebook, and Microsoft fell by more than 6%.
The Elon Musk-led Tesla, a major tech stock not included in the S&P 500 index, took a veritable beating by losing 14%. Data storage device manufacturer Western Digital sank 13%.
IT services company DXC suffered the biggest loss of the tech firms in the index, falling 18% by the day’s close, CNBC notes. Rough news, considering DXC’s share price dropped almost 30% last year .
Oil, coronavirus fears put pressure on global markets
A tussle over oil output between Russia and Saudi Arabia has been blamed for the epic downward pressure on global markets, fuelled by plunging oil prices and rising coronavirus anxiety across the world.
The carnage on the major US stock exchanges was so great that so-called “circuit breakers” were tripped, pausing trade for 15 minutes in a bid to halt panic-selling.
Recovering slightly on Tuesday’s open, the S&P 500 index is up just over 3.50% at pixel time, while Apple is in the green by 4.72%.
Facebook’s Libra ‘cryptocurrency’ is turning into a soap opera — and it’s gonna be a long season
Facebook ’ s controversial ‘ cryptocurrency ’ project is turning into a bit of a soap opera, starring the tech giant and regulators as the main characters.
Just yesterday, Germany ’s finance minister Olaf Scholz said the departure of several high-profile partners from the project was a good sign, but unsurprisingly the Libra Association had a different take altogether.
The Association, which just this week managed to get 21 organizations to sign its membership charter, took to Twitter to defend itself.
It’s not entirely clear whether the tweet, which I’m sure was supposed to read “doesn’t agree with us,” was directed at one single article or simply a message being sent to address sentiment across the entire industry .
The UK is up for it, maybe
Interestingly, though, Libra seems to have found an unlikely ally in the UK .
Mark Carney, the governor of the Bank of England , has leapt to Facebook’s defence , warning that the UK ‘s “slow and expensive” payments system was “not good enough in this day and age.”
SoftBank wants to buy back 45% of its shares to survive the coronavirus
Japanese billionaire Masayoshi Son has a plan to save SoftBank from the coronavirus: Sell $41 billion worth of its assets and use the cash to clear debt and buy its own shares.
Masayoshi hopes such drastic measures will reassure shareholders of his firm’s resilience under threat of global recession. “This will allow us to strengthen our balance sheet while significantly reducing debt.” he said in a statement .
SoftBank now intends to purchase 45% of all shares that exist on the market, after it revealed a $4.5 billion buy-back scheme earlier this month. This is now the largest cash injection in the tech conglomerate’s 38-year history.
So far, there’s been no word on whether it will re-sell the shares or retire them.
Coronavirus is just the start of SoftBank’s problems
There’s more to the SoftBank saga than coronavirus woes. A string of bad calls made by its $100 billion, Saudi Arabia-backed venture firm Vision Fund has also led to loads of debt: The most spectacular snafu being the billions pumped into property startup WeWork before its disastrous IPO .
Vision Fund also made significant investments in ride-hailing startups (Grab, DoorDash, and Didi) and hotel groups (Oyo) — two areas hardest hit by coronavirus-related measures.
There’s also the matter of Elliott Management, the “vulture fund” that buys into what it perceives as struggling companies and pushes for drastic change. It recently amassed a $2.5 billion stake in SoftBank, using that sway to demand a $20 billion share buy-back scheme and increased transparency.
In fact, included in SoftBank‘s buy-back notice is an announcement: that an independent party had been hired to find three candidates to present as independent board members, further demonstrating the gravitas Elliott Management holds over SoftBank right now.
Whether suddenly liquidating $41 billion for use as a disaster-relief fund will be enough to placate SoftBank shareholders in the long-term isn’t yet clear, but it’s a start.
So far, traders in Tokyo have reacted favorably. SoftBank‘s share price jumped more than 18% after the plan’s announcement, which CNN noted was its biggest daily percentage increase since November 2008. Until then, SoftBank‘s share price had declined 40% since the start of the year, and its profits were down 99% as of its most-recent earnings report.
As for what SoftBank is likely to sell — analysts expect it to trim its positions in Alibaba, of which it still owns a 25% stake. Other candidates include the recently merged telecoms providers T-Mobile and Sprint.