As Darren Winters points out, the FAANG stocks bubble burst is now so audible that you would have to be hard of hearing or have your earplugs on not to be aware of it. FAANG (which is an acronym for Facebook, Amazon, Apple Netflix, and Google) stocks is currently in a grizzly bear-market. A bear market is defined as a 20% fall or more from a stock’s 52 week high.
The FAANG stocks bubble burst has thrown what was once the apple of the eye of investor’s technology stocks to the bears. FAANG stocks are in a bear attack, all of the big five are bleeding more than 20% declines from their all-time high.
Let’s put some figures on the FAANG stocks bubble burst
Facebook stock has declined by a significant 39.5% from their all-time Summer 2018 high.
The social-media behemoth’s stock lost roughly one-fifth when it warned that revenue growth will take a hit. Facebook earnings also included “nightmare guidance”. Put simply, with no light at the end of the tunnel the bears are all over this stock.
The online retail giant, Amazon, is also giving the FAANG stocks bubble burst a bang for its money
Amazon stock is down a nasty 26.7% from their July 2018 high. But as Darren Winters explains, those declines need to be put into perspective, bearing in mind that Amazon stock has doubled over the past year with its valuation briefly soaring to $1 trillion.
The company has an exponential business model, it continues expanding, dominating retail and now moving into logistics-shipping. Despite the sound reason for being upbeat about Amazon the company’s stock is in a bear territory. Perhaps the decline of Amazon is more a story about the central bank’s quantitative tightening or unwinding of its massive balance sheet. So the decline of Amazon stocks is more a story about tighter liquidity conditions that prevail in a post QE world.
Moreover, Government legislation could also rattle Amazon stocks going forward.
Apple is in the FAANG stocks bubble burst club
The Apple iPhone is reaching market saturation and approaching the end of its product life cycle.
Apple stock is down 23.8% from its all-time high.
In early November Apple dropped below its trillion dollar company on disappointing sales figures.
Whatsmore, Netflix and Google are in the FAANG stocks bubble burst club
Netflix stock is down 37.4% from its all-time high earlier this year. The company’s stock has clocked the second biggest fall amongst the FAANG stocks.
Google has just entered bear territory with its stock down 20.7% from its all-time high earlier this year.
So the FAANG stocks bubble burst is in play. Moreover, with FAANG stocks now all bear territory it is weighing on the technology sector. In a post QE world and the rise of protectionism the FAANG stocks bubble burst is a story with legs.