On Monday, my life was not changed, ruined or left in a panic.
I was not one of the millions worldwide who cried out in terror because I could not post my every life moment on Facebook.
At 12 p.m. Eastern time Monday, Facebook and its compatriot social media platforms — Messenger, WhatsApp and Instagram — suffered a six-hour outage that created social media pandemonium.
While Facebook is not my social media outlet of choice — I tend to stay on Twitter — I did pay attention to the outage’s impact on Facebook’s stock price.
And there’s a bigger story here…
In this episode of The Bull & The Bear, I explain how the outage pushed Facebook’s stock down further and how its continued decline can be traced to something that happened a month ago.
Bigger Tech Stock Decline Hurts Facebook
Technology stocks have benefited from strong market sentiment and this long-running bull market.
The Technology Select Sector SPDR Fund (NYSE: XLK), an exchange-traded fund (ETF) that invests in U.S. tech stocks, hit a high of nearly $160 per share in late August. However, since then, the ETF has dropped nearly 7%.
The tech stock sell-off is much deeper within specific segments:
BVP Emerging Cloud Index Hammered Last Month
In the last month, EMCLOUD, which tracks cloud-based tech stocks, has declined 9.6% in value, while the tech-laden Nasdaq is down 6.1%. Conversely, the S&P 500 has only lost 3.9% and the Dow Jones Industrial Average is only down 2.2%.
Facebook is in worse shape — dropping nearly 12% in the last month.
The Bull & The Bear
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Matt Clark, CMSA®
Research Analyst, Money & Markets
Matt Clark is the research analyst for Money & Markets. He is a certified Capital Markets & Securities Analyst with the Corporate Finance Institute and a contributor to Seeking Alpha. Prior to joining Money & Markets, he was a journalist and editor for 25 years, covering college sports, business and politics.