June 12, 2017
Alex Wilhelm is the Editor in Chief of Crunchbase News, covering the intersection of startups and money.
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Morning Report: “Tech stocks continue to get slammed.” — Yahoo Finance iOS App, June 12. 2017

It’s another bad morning for tech stocks, with mid caps, recent IPOs, and the biggest tech shops taking a beating.

Today’s selloff of tech stocks comes after something similar happened on Friday, when leading tech companies dove, and their smaller compatriots followed them into the pool.

Quickly, here’s the two-day chart, showing the Dow Jones Industrial Average (Blue), the S&P 500 (Yellow), and the Nasdaq Composite (Red):

For the coffee-free among us, the chart shows that tech stocks — our proxy is the tech-heavy Nasdaq Composite — fell far further than other industries on Friday, and it has kept up the downward slope today in partial contrast to other indices.

Notable this morning isn’t the fact that Cloudera is down another 4.5 percent or that not a single 2016 or 2017 US-listed tech IPO is up. What’s notable is that tech’s brightest lights have given up $60 billion thus far today.1

(Small production note: When I started this brief entry, the number was $50 billion. After a few paragraphs, $60 billion.)

$60 billion or not, tech’s Big 5 — Alphabet, Amazon, Apple, Facebook, Microsoft — are still worth around $2.75 trillion, using Google Finance data.

So the fall here is large in dollar terms, but it is cosmetic in a sense to their real value. Those companies are massively wealthy and profitable, and that has not changed. But the upward swing is backwards for yet another day.

As we wrote last Friday:

None of this matters if today is a one day dip. But if this keeps up, we could have just kissed the market’s high yesterday, starting the downward slope today. But then again, if you or I knew that, we’d be rich.

For tech, this is day two.

As always, we care about public tech stocks’ individual and aggregate performance because their performance can greatly help set the tone for private tech companies. Hotter public performance can bolster and defend private valuations, fatten wallets that can be used for acquisitions, hype otherwise-calcified venture capitalists, and stick a book in the IPO window so that a firm or two can slip through.

  1. This flips back and forth, as some companies in the groups are close to zero.

From the Crunchbase Daily:

Uber takes Holder’s advice, CEO considers leave

  • There’s been a lot of news out of Uber lately. Most recently, the company’s board voted to implement all recommendations in a report from former U.S. Attorney General Eric Holder addressing concerns about harassment and other internal issues. CEO Travis Kalanick is also reportedly considering a leave of absence.

LexisNexis buys Ravel Law

  • Ravel Law, a provider of legal research analytics tools, is selling to LexisNexis for an undisclosed sum. San Francisco-based Ravel Law, which was founded in 2012, previously raised about $15 million in venture funding.

FireEye stumbles don’t deter security VCs

  • Cybersecurity venture investors aren’t deterred by the share price plummet of one-time cybersecurity darling FireEye. Rather, security companies are getting stepped-up attention and landing very large rounds as investors look for the next crop of IPO candidates, Crunchbase News reports.