Big Tech’s sell-off

BUSINESS BOOMS and busts follow a pattern. They start with an exciting change in the economy. Managers and investors collectively create a story about it, which begins as an explanation, then morphs into an extrapolation, and then into an exaggeration. Eventually the data contradict the narrative, boom turns to bust, and a bout of austerity follows. A rout in internet firms’ share prices since August has led plenty of people to ask if the tech industry is experiencing this sequence of hope, hubris and hurt for the second time in two decades. The answer is: to a degree, yes. The level of hype is particularly high, and some of the numbers are decidedly soft. That matters because tech firms are now so big and so spendthrift that a slowdown could damage the economy.

Rarely in stockmarket history have so many investors made so much money from so few shares going up for so long. Some 37% of the rise in the value of all firms in the S...



via Business Feeds

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