Stock price is based on speculation. And these days it's not even speculation about the future performance of the company but instead it's speculation about what other investors are going to be willing to pay for a share.
"$76b in wealth disappeared" is a dumb statement. Speculative value is not wealth any more than fantasy football wins the superbowl ring.
It didn't disappear, that money failed to transfer from someone who has the cash to someone who had the stock.
The first dotcom bubble was fueled in part by opening up the stock market to new users through IRA and 401k accounts, and through direct, low cost brokers like Schwab and ETrade. A huge amount of money went into the stock market that historically had gone into bank savings accounts.
Where's the money supposed to come from these days to fulfill fantasy valuations?
"Facebook is one of the greatest consumer Internet companies of our generation, but for the time being the company is trading at half its IPO price. Groupon and Zynga, also titans of the industry, have been in free-fall since their last earnings call, now down more than 80 percent from their peak. $76 billion in wealth disappeared from those three companies alone — enough to buy every home that sold in Silicon Valley this year nine times over."
"$76b in wealth disappeared" is a dumb statement. Speculative value is not wealth any more than fantasy football wins the superbowl ring.
It didn't disappear, that money failed to transfer from someone who has the cash to someone who had the stock.
The first dotcom bubble was fueled in part by opening up the stock market to new users through IRA and 401k accounts, and through direct, low cost brokers like Schwab and ETrade. A huge amount of money went into the stock market that historically had gone into bank savings accounts.
Where's the money supposed to come from these days to fulfill fantasy valuations?