Shares of Tesla, the most representative tech stock listed on the New York Stock Exchange (NYSE), suffered its biggest ever drop, crashing 21.1 percent on Tuesday. Tech-heavy Nasdaq also tumbled more than 10 percent in three trading days, raising concerns about tech stock crash.
The Nasdaq plummeted 4.11 percent on the NYSE on Tuesday (local time) following the Labor Day holiday, falling over the last three trading days. Experts say the Nasdaq has fallen into correction territory, having lost more than 10 percent from its recent high since last Wednesday.
There has been a constant controversy surrounding big tech bubble and tech stocks started to plunge all together on Tuesday, with the big-six tech stocks, including Microsoft (-5.4%), Apple (-6.7%), Alphabet (-3.6%), Amazon (-4.4%), and Facebook (-4.1%) falling sharply along with Tesla.
In particular, shares of Tesla, which jumped six times since the start of the year, suffered the biggest decline since going public in 2010. The electric vehicle maker is faced with difficulties, such as its failed attempt at S&P 500 inclusion and a $5 billion stock offering. Watching the unexpected surge of Tesla shares compared to the company’s management result, Wall Street analysts have called Tesla the biggest house of cards that is getting ready to fold.
Furthermore, there was a growing concern in the market that tech stocks have soared more than their actual value as SoftBank Chief Executive Son Jeong-ui recently spent $4 billion buying call options for tech companies.
The market cap of big-six tech companies has increased by $3.2 trillion this year, raising a controversy that it is close to the level of the dot-com bubble. “U.S. tech stocks hit correction territory ending a short-term boom,” said Lee Kyung-soo, head of the research center at Meritz Securities. “But it will not lead to general declines.”
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