Chapter 1088 Bubble Burst

Microsoft's monopoly case was opened again. The judge declared that Microsoft does have monopoly behavior, and the evidence is solid, that is to say, Microsoft will face huge fines and risk of being forcibly split.

On this day, many investment institutions also discovered that the Nasdaq index exceeded 5,000 points. At this time last year, it was less than half of it. In one year, it has doubled!

So they saw that Microsoft was going to lose the lawsuit, and they thought that Cisco, Dell and other companies that had business dealings with Microsoft would inevitably be affected, so they decided to sell these stocks they held.

At this time, a crash occurred in trading operations. Some major shareholders sold these constituent stocks at the same time, causing the Nasdaq stock index to drop instantly, falling by 5% on the same day.

Of course, there is also Feng Yu's relationship in this. Feng Yu also joined forces with Kirilenko and Fu Rongqi to sell some of the last constituent stocks in his hands this year.

What made Feng Yu and the others curious was that there seemed to be another hand controlling these things, because when they were short selling the Nasdaq index, someone actually built a position first, and the money was huge.

The Nasdaq stock index hit a new high yesterday, and some people built positions at high levels. How are they sure that the Nasdaq stock index will fall?

Unless, this person knew in advance the news about selling stocks such as Microsoft, Cisco, Dell, etc. at the same time.

So how powerful should this person be, to be able to connect with so many big investment institutions?

Feng Yu thought for a long time, and felt that there seemed to be only one person, in line with his guess, and that was Soros of the Quantum Fund!

Only Soros dared to make such a bold operation, and could understand the movements of these big investment institutions. And short selling has always been Soros' favorite thing to do.

Feng Yu wasn't sure either, but he didn't care either. He and his partners have already built a large number of positions at 5,000 points. Although the leverage ratio is not high, judging from today's decline, the panic selling will be even worse tomorrow, and the stock index will fall even more.

The trial of Microsoft's monopoly case was just a trigger. When Feng Yu sold Microsoft's stock last year, Microsoft's stock price stopped growing, but many other stocks were still rising wildly.

The most interesting thing is that most of the companies whose stock prices have risen wildly are not yet profitable. Expenditures are greater than income, that's it, and the stock price has risen much more rapidly than companies with good profits such as Microsoft.

Those companies are all selling so-called ideas. As for whether they can be transformed into reality, it seems that everyone is betting. Once the bet is won,

Then you can get multiple returns. As for losing the bet, they never thought about it.

Even in the past two years, venture capitalists have been particularly fond of Internet technology companies, and the scrutiny has been continuously reduced. They all want to use this shareholder style to make the company go public and make a fortune.

Some people also said that the selling of stocks by those companies has nothing to do with Microsoft's antitrust case, but because most of the companies in the just-published financial statements of listed companies are loss-making.

This has sounded a wake-up call for many investors. It is not because the company becomes larger that it will definitely be able to make money. The assets of these Internet companies have indeed skyrocketed, but the money raised from the stock offering has not brought any benefits at all.

Those visions of them still seem so out of reach. Many Internet companies have already spent all their venture capital funds and funds from stock offerings, and are still losing money!

They use investors' money to acquire and merge other competitors in the same industry, accelerate the launch of their own new services, strive to penetrate into cross-industry fields, and strive to promote their own brands.

This seems to have entered a strange circle of network enclosure, and also formed a novel Internet rule. But the bosses of all the companies never think about why their companies are worth so much money? How can the company be worth hundreds of billions of dollars based on the products of Yahoo? How much is their company's annual revenue?

This seems like a bottomless pit, who would dare to invest in it?

These financial annual reports and quarterly reports are also considered by many people to be the trigger of the real dot-com bubble and the incentive for those large investment institutions to sell Internet technology stocks.

And there is another theory, that is, the millennium bug. That is, a loophole in an algorithm will cause chaos in the systems of many companies. In order to make up for this loophole, enterprises have to increase expenditures, which intensifies the financial pressure on enterprises.

There are many arguments, both supporters and opponents, but no matter what the reason is, the Nasdaq stock market began to fall, and the stocks that bear the brunt are Internet technology stocks.

Feng Yu has another algorithm, which is to calculate the real rate of return of Nasdaq stocks.

Since 1998, the real rate of return of Nasdaq has been less than 3%, even lower than that of bonds, and even lower than the theoretical rate of return of 6.5% that this kind of prosperity should have reached.

Some researchers believe that all equity shares have a premium to varying degrees, and the premium is about 7%.

In other words, Nasdaq stocks are overvalued. Whether it is Microsoft, IBM or Dell, they all benefit from the push up of irrational prosperity.

And now, the bubble has burst, and they are also the first company to fall, and it can even be said to be the leader.

...

The crazy decline of Nasdaq, and even the stocks of the New York Stock Exchange also fell. Many companies that obviously have nothing to do with it have been affected.

I don't know where I heard the rumors that the stock market is about to crash again. Haven't you seen that Microsoft, IBM and other companies can't stand it!

As a result, more people began to panic sell stocks, thus forming a vicious circle.

The more people who sell, the faster the stock price will fall, and the faster the stock price falls, the more people will sell.

In less than a week, the Nasdaq stock index fell by nearly ten points, which was the biggest drop in more than ten years.

Affected by this, stocks in major financial markets around the world have fallen a bit, especially Internet technology stocks, which have fallen the most.

Paul Allen deeply regretted it at this time. If he had known that Microsoft's stock price would continue to fall, he would have cashed out a sum of money. He still holds a lot of non-voting shares, and selling those will not affect his right to speak in the company.

It's not good to invest in something, you won't know that your assets have shrunk again every day, right?

But on this kind of day, it seems that he is still young.

Not only Microsoft, but the boards of directors of IBM, Dell and many other big companies are meeting every day to study how to save their companies and stop their stocks from falling like this.

Although the decline in the stock price does not have much direct impact on the company's operations, it has a great impact on the company's brand and reputation, and it also has a great impact on shareholders who hold the company's stock. When the stock price falls, it means that their assets have shrunk!

They couldn't figure out why the Internet bubble was burst?

... (To be continued.)