The rapid growth of inflation and the impending recession led to the fact that in just three days, from October 25 to October 28 of this year, leading US companies lost $ 700 billion.
The seemingly unsinkable Apple Inc. – a corporation engaged in the development and sale of computer equipment and software that has become a cult; Microsoft, one of the ten most expensive brands in the world, is one of the largest corporations, a leader in the field of information technology, supplying a wide range of devices and services, software and IT services; the ubiquitous Meta Platforms Inc*. is a multinational holding company that owns a technology conglomerate and has already launched its tentacles into big politics.
Blacklisted and Amazon.com Inc. is a multinational technology company specializing in e-commerce, cloud computing, digital streaming and artificial intelligence. Amazon has been called one of the most influential economic and cultural forces in the world. Alphabet, an American holding that appeared in 2015 as a result of the reorganization of Google, also got there. Through subsidiaries, the holding distributes Internet advertising.
If in 2021 there were seven companies worth more than $1 trillion in the United States, by the end of 2022 there were only four. But the fact that stocks are falling is just the tip of the iceberg. Mass layoffs of “white collars” are a very alarming signal.
Now in the spotlight Elon Muskand not at all because of his fantastic space exploration projects. When he became the owner of Twitter at the end of October, he put not only top managers on the street, but also half of all full-time employees – 3,700 people. The rest were forced to return from the “remote work” to the office and the screws were tightened in terms of labor discipline.
Twitter employees, in turn, sued the new owner. They argue that Musk is laying off staff without proper notice: under federal and California law, employees must be given 60 days’ notice that they are about to be fired. Right now, it’s illegal to give a kick in the ass. And in two months – for a sweet soul!
Twitter is not the only example. Technology companies are laying off employees by the tens of thousands. And investors are reviewing the contents of their portfolios.
The Wall Street Journal writes: “Big tech stocks are in their biggest drop in ten years. Some investors, who are haunted by nightmares of the dot-com collapse in 2000, expect big losses. Investors say the decade-long era of tech company dominance is coming to an end.”
Judge Andrey Bunich believes that the crisis in the high-tech industry was inevitable:
– I think that stocks are falling due to the inflated bubble that is taking place in the financial markets. The fact is that the shares of many companies are highly overvalued. Especially those connected with high technologies. They are clearly overpriced.
Under normal conditions, the financial market behaves like this: there is a rise, then a decline begins, then it levels off. But now we are facing the consequences of the fact that, since 2008, all central banks have pumped money into the financial markets. Many companies appeared, whose shares rose in price due to competent PR, while they themselves often only issued colorful press releases.
And for investors, by and large, it doesn’t matter what they invest their money in. It is important for them that the value of the shares grows. That is why they invested in the shares of the so-called high-tech companies. Although it would be more correct to call them “virtual”. High technologies are associated with completely different segments.
According to the economist, now we are seeing a logical trend: the shares of “virtual” enterprises are beginning to depreciate. Against this background, investors are beginning to show interest in industrial enterprises.
— The crisis situation forced us to pay attention, for example, to enterprises of the military-industrial and oil and gas complexes. Investors remembered that it is much more profitable to invest in them than in companies that do not know what, but promise to make humanity happy someday in the future. And if this trend continues, then many things will change for the better for enterprises that produce real products. It will become easier for them to attract investments, banks will be more willing to lend. This is first. And secondly, we are now witnessing the process of deglobalization of the economy. Globalization is another phantom that has been artificially inflated. Actually, deglobalization has been going on quietly for a long time, but now it has become obvious. This includes the transfer of production from third countries, and the reorientation to domestic demand in China, this all concerns, mainly, the real sector, – Andrey Bunich explained.
And, since we are talking about China: there the government demonstratively supports those high-tech companies that actually create something new that contributes to the progress and development of science. Remember how the Chinese authorities fought for Huawei when the US accused this company of espionage? China is actively building its own world-class semiconductor industry, investing huge amounts of money in related projects. And spends impressive funds on the development of artificial intelligence.
But software companies go to the forest for free bread. Because the leadership of the country in the field of science and technology does not depend on how selflessly its citizens play computer games, order food on the Internet or shop online. This is due to scientific and industrial advances that “virtual” companies simply do not have.
*American multinational holding companyMeta Platforms Inc.» for the sale of products – social networks Facebook and Instagram by decision of the Tverskoy District Court of Moscow
** Social network blocked in Russia