The Facebook IPO on May 18 marked a before and after moment for the technology sector. But as we very well know, it wasn't because the social network site wanted to surpass Google as the biggest tech IPO in history. Peter Bo Kiager, a strategist from Saxo Bank, said that "the fact that analysts have been so imprecise about interpreting whether Facebook is capable of shows an inherent risk in its value proposition. And we see major volatility in the stock's price as good and bad news is interpreted by the media."
Still, even though Facebook has won interest and revenues from investors (reflected in a flood of delayed tech IPOs such as the hardware manufacturer Object, the Chinese commerce portal LaShou and software manufacturer Cantor Entertainment Technologies), what's true is that, 2.0 bubble or no, United States technology firms are still trying hard to succeed in increasingly bearish markets.
Despite the weak markets, the tech index par excellence is proving itself. At mid-session yesterday it fell to 2,530 points, with losses greater than two percent. Despite the fact that the Nasdaq has recently shaved 9% since its yearly high (it hit 2,784 points on April 2), it is still at highs not seen since January of 2011.
Further, this index is the most bullish of US stocks, having accumulated double-digit profits (around 11.2%). And it did so after having closed the past three fiscal years in the black. At this point, it is important to monitor whether the company's fundamentals follow their gains.
