Full text, because people are having issues. BTW: Use the "web" link, but open it in incognito.
Technology sharesare struggling to regain favor with investors, even as the rest of the U.S. stock market is back near record heights.
Many of the industry’s leading companies have followed up a rocky start to the year with weak earnings reports this week and are warning of more bleeding to come.
Business conditions for old-line tech stalwarts like International Business Machines Corp. and Intel Corp. have grown tougher, while Microsoft Corp. and Google parent Alphabet Inc.disappointed investors with their results this week. In addition, one of the sector’s key sources of support—successful stock-market debuts by highly anticipated tech companies—also has dried up.
The result has been a selloff. Technology companies in the S&P 500 fell 1.9% Friday, nearly erasing the sector’s gains for 2016. Alphabet’s 5.4% fall Friday was its biggest since October 2012 and wiped out $29 billion from its market capitalization.
Investors have pulled a net $4.5 billion from technology mutual funds and exchange-traded funds in 2016 through the end of March, according to Morningstar. That follows three years of net inflows.
“The market is near all-time highs again, but I don’t feel good,” said David Rudow, a senior equity analyst at Thrivent Asset Management. “There’s some good stuff out there, but it’s not like things are rosy and things are booming, especially in tech.”
A slew of technology companies is scheduled to report results next week, including Apple Inc., Twitter Inc. and Facebook Inc., whose stock has risen by double-digits the past two years. Apple is currently projected to be the largest contributor to the tech sector’s first-quarter earnings decline, according to FactSet.
The initial-public-offering market, which typically juices tech companies’ stock prices, also dealt a blow to the sector this week. SecureWorks Corp. ended a four-month-long drought in U.S.-listed technology IPOs this week. But the cybersecurity firm’s debut came at a lower-than-expected size and valuation, and its stock opened its first day of trading lower and ended the day flat.
“The technology IPO market was slow last year and will continue to be slow this year,” said Colin Stewart, head of technology global equity capital markets at Morgan Stanley.
A strong debut by a new company can justify to investors that its public peers also deserve higher share prices. In the past year, however, shares of newly public tech firms have wobbled. A number of closely watched tech IPOs are trading below their IPO prices.
Gregory Becker, president and chief executive of SVB Financial Group, the parent company of Silicon Valley Bank, which works with start-up tech companies, said on a conference call Thursday that IPO markets could remain weak for some time. Lower valuations for privately held tech companies could instead drive M&A activity, he said.
There are now at least 146 private companies valued by venture firms at $1 billion or more, according to Dow Jones VentureSource. Bankers and investors predict that only a minority of those companies would consider debuting this year. Several mutual funds have been slashing the valuations of privately held companies recently. “If I had a great company that didn’t need the capital but could go public, this isn’t the time to take it out,” said Tripp Jones, a general partner at the venture-capital firm August Capital.
Even as publicly traded tech companies have traded lower, investors in private companies and executives worry that companies will struggle to match or exceed their most recent private valuations. Yet late-stage private capital has been drying up, which could push companies that need funding to go public.
“Companies are going to have to tap the public markets, because the alternatives in the private markets are going to be punitively dilutive,” Mr. Jones said.
Executives on recent corporate earnings calls have highlighted a slowdown in tech spending due to concerns about the health of the global economy, which adds to uneasiness, analysts said. Fears of slowing global growth shook financial markets at the start of 2016, leading to a dropoff in business spending.
The slowing of spending on tech isn’t necessarily going to last forever, said Hari Srinivasan, research analyst for the Neuberger Berman Global Equity Research Department.
“If the global environment doesn’t go through any shocks and continues to recover slowly we could see tech spending come back in the second half of the year,” he said.
The tech-heavy Nasdaq Composite fell 15% from the start of the year to Feb. 11, while the S&P 500 fell about 11% during that period. While both indexes have bounced off their lows, the Nasdaq still remains in the red for 2016. It’s a big reversal from past years. In 2015 the Nasdaq ended the year up 5.7%, while it rose 13% in 2014—outperforming the S&P 500.
Even with recent declines, the technology sector isn’t cheap, analysts say, which makes it harder to justify scooping up shares. Technology companies in the S&P 500 currently trade at an enterprise value—which includes debt and equity—that is 11.6 times its past 12 months of earnings before interest, tax, depreciation and amortization, according to FactSet. That is up from a year earlier and well above the group’s 10-year average of 9.8 times.
Sooo many people on HN despise ads (rant after rant about using adblockers) yet hate paywalled articles. How is it, exactly, do you want people to get paid for writing quality journalism? You can immediately see it's a WSJ url -- if you don't have an account because you don't value their writing then skip this post and move on.
It seems clear that a significant minority of HN simply objects to the idea that writing is a valuable and worthwhile economic activity. That's my only explanation for how they can oppose literally every viable method of monetizing content.
Anything with low-effort access will always connote little value in people's minds because endless alternatives exist. Anyone who wants to get paid for doing something hard should avoid channels like that, or only use them to float associated freebie products that can introduce people to the real product.
Given that officialchicken has a sense of entitlement so misplaced that even the minimal effort to work around the paywall is more than he feels he "should" provide, it's safe to say the guy is just an asshole and idiot. An asshole, because he expects something for nothing, and an idiot for thinking that attitude has any place in a sustainable ecosystem for solid news.
Harsh language, I know, but if assholes and idiots are the ones who determine what HN readers can and cannot post, it can only end badly for HN as a whole. After all, why would any intelligent person make time for a news board dominated by people who have nothing but contempt for the work of journalism?
As ad blocking increases, browser makers should add a type of "in web-page" payment system directly built into the browser. Paywalls are annoying because of friction. But imagine this instead:
1) open page
2) short preview and button "5 cents to read all"
3) click button and browser opens built-in dialog similar to how appstore/play store in app purchase works.
4) since its part of the browser, no concerns about trust or security.
This kind of frictionless and cheap paywall has the potential to replace ads. But browser makers must build it into the browser.
^^this, I would gladly micropay for numerous outlets , i don't want to have to manage multiple different subscriptions.
In fact I would take it further and auto approve payment for my visit to avoid the click, set a limit of $n per source and/or $n total spend per month.
It's high quality unique journalism, I hope people don't stop submitting their links. If a story is available elsewhere then by all means, but a WSJ exclusive story is definitely worth linking to.
The web link apparently fails for a lot of these now.
I don't think it's unreasonable to be annoyed by links that require a subscription or payment to view.
I think a good compromise would be some sort of [Pay] tag on the link.
Edit - it's also hard to have an honest discussion about an article if you don't have a subscription to that site. That requires a bunch of extra work (getting the subscription) just to fairly participate in the discussion here.
Maybe that's fine, up to the HN community to decide.
None of the results on the first page of google contain more than the first few sentences of the article. I think I got the gist of the article from those two sentences, but it is kind of annoying to not have the details or nuance that I'm sure is present in the rest of the article.
Given the number of WSJ articles I've seen recently, I am getting suspicious that one of the following is happening:
1. A lot of HNers upvoting articles without reading them
2. HNers are getting past the paywall (illegally)
3. The WSJ staff is upvoting their own articles to get a page view boost (and thus a few more ad dollars)
Of course, there could just be more people on HN that pay for the WSJ than I thought.
> 2. HNers are getting past the paywall (illegally)
It's not illegal to bypass a paywall by Googling the article. They literally programmed the paywall to work that way. It's how I read (and upvoted) the article.
If Googling it doesn't let you get past the paywall, try incognito.
I think they're using some kind of heuristic approach to identify people who use the google approach regularly and put a stop to it. I know sometimes when I click on a Journal article it will let me read it, sometimes it won't. It's a tricky tactic, I'd just totally ignore Journal links otherwise. But this way they get to bug me semi-regularly instead of not at all.
which i find pretty sad. that hurts both the wsj, who would rather be paid for your reading their content, and the creative commons alternatives for your time and attention, because people here are now reading and discussing pirated wsj content rather than genuinely free-as-in-everything writing.
