Ask HN: What do HN users feel about the downfall of tech stocks?
There are lot of speculations around economic crisis given tech stocks are in down fall and some companies started talking about reduced hiring ( FB, Uber).
I’m hoping later this year we start to get some breaks in the news cycles and see market recovery. Sentiment matters. Apple will still continue to innovate, Cloudflare’s launched a bunch of cool new stuff this week, lots of cool EV companies in the pipeline. The market will reflect this all sometime hopefully soon!
- "Fugayzi, it's a fake."
- "Fugayzi, fugazi. It's a whazy. It's a woozie. It's fairy dust. It doesn't exist. It's never landed. It is no matter. It's not on the elemental chart. It's not fucking real."
Fed is going to let their debt roll off continuing to contract the money supply. Inflation can't really be tempered by fed policy with shutdowns in China. Reducing demand helps but not much when supply is being reduced at the same time.
I'm in cannabis CPG and industrial real estate. Right now cannabis retailers aren't paying their bills to distributors/manufacturers. It's ugly. Lots of blood. I see cannabis as the canary in the coal mine because there's an easily substituted product (black market cannabis) and it's the first thing to go when people are broke. I'm watching my industry collapse in real time. On the industrial real estate side I'm preparing for my tenants to default in the next 2 years. I'm okay with that because I'm in prime Los Angeles market and very liquid. If they default I'm not sweating it.
Personally I think there will be a lot of stock delistings and a credit and/or liquidity crisis. Anyone burning cash right now is flirting with death IMHO.
This is just my 0.02. My source is having lived through two of these already: 2000 and 2008.
Typical knee-jerk reactions by publicly traded companies is to restrict hiring, restrict admin spending and possibly have layoffs. There are some companies posting positive quarterly results and their stock still moves down so this downturn isn't really something a company can do anything about. If employees are sitting on a bunch of grants/options there is a chance they might be worthless depending on how they're awarded.
I suspect the few trillion dollars pumped into the economy the last couple years is catching up with itself. At end of Q2 if GDP is down/slowed then I think someone will use whatever official wording they use for downfall/recession/slump/correction. And people will go "gee really?!?"
Total revenue today is 1.3 billion, with a profit margin of -60% which is getting worse and not better.
Can they 20x their revenue and cut costs by 50%?
Nope, their own MAUs plateaued already.
That said, having just bought a BA house, I'm mentally preparing to ride a long downswing or stagnation in home value. It will be interesting to see how much inflation softens the blow for real assets.
I'm not aiming to make any tech stock value plays, but watching physical goods manufacturers
This will be the 3rd time through an industry low point in my career. Most people will get through it. Some will retire, some change industries. As long as society itself does not collapse, we'll all get through it. (And if it does collapse, we'll have bigger fish to fry.)
It is very hard for small startups to offer something comparable to 200k salary and 200k a year in RSUs.
But if those packages are now worth 200/70, maybe a salary of 200k and stock options that might be worth a couple million look more more appealing, especially if someone is tired of a big company.
I have a few friends who have expressed this. They wanted to leave the bigcos, but felt like they couldn't because of the money they'd be walking away from. Now they said they're looking at fun startups since their Bigco stock grant is worth so much less.
Of course, if you were already pulling 200/200 from a big company, you might have already banked enough of a nest egg to feel comfortable with the risk of startups.
If that were true, everyone's compensation would've doubled or so in the last decade, but that phenomenon is mostly restricted to big/SV tech.
The drop in inflated securities prices seems like its just the business cycle doing its thing. Take a look at the Wall St. Cheat Sheet. We're still at the Denial / Panic phase, but we'll get to the Anger / Depression phase in time.
Its a bit surprising to me there hasn't been _more_ tumult, given all that has been happening in the world the past few years.
Everyone else is worried about Main St stuff: housing, food, education and healthcare costs.
On the other hand, this usually ends in a lot of layoffs, and I'm not exactly thrilled at that prospect.
Otherwise, my feeling is that this entire industry is ridiculously bubbly and "the stock market is just a graph of rich guys' feelings", money isn't real, etc. etc.
Normal people think "risk" is you buy a stock and then it get announced some Friday evening after the market closes that the CEO was a crook. It opens on Monday at 7% at what it was worth Friday and it is down from there. That kind of risk revolves around the fear of some distinct event.
Hedge fund people think that "risk" is something like Brownian motion that has an upward bias in terms of return. The whole reason you buy stocks is because you want to get exposed to that "risk" so you get the reward that comes with it. If the stock goes up 3x tomorrow that is "risk" too, particularly if you are shorting it!
"Memes" as an explanation for the collective software of the human species is not such a bad idea. Here is some art, music and poetry by Burroughs and Anderson:
what happened was tech was wildly profitable and became overvalued. tons of capital is invested in US tech stocks thats why compensations are through the roof. but the stock inflation did not reflect technological progress, but rather too much capital, both printed us dollars and foreign capital (europe has no tech sector worth investing in sadly). Companies seemed to care more about making bank from an IPO than making actual money. That is going to change now, and we ll have to see some actual moneymaking tech.
It's also been at least 10 years now that HN is all about bloated frameworks that make tech dumb-proof but not more capable. i hope this will end now as well
Less sarcastically, I think it means this tax proposal is DOA
Fun times and it'd be a Fun Friday Close.