So, the whole world thinks the technology stocks are next in line to get the spanking from the subprime crisis. That’s just silly. If you didn’t know, Nasdaq was punished on Thursday because Cisco System Inc. (Nasdaq: CSCO, stock) indicated his company has been having trouble selling products to its 25 largest customers particularly financial institution. Without identifying them, Cisco whined that the reluctant buyers include eight banks.

Logically when a company is hit by financial difficulties, one will tend to temporarily evaluate and might stop the purchasing of luxury items and this does not only confined to I.T. hardware(s) or software(s). It could affect other expenditures such as office upgrades or renovations, salary raises, retrenchments, staffs’ benefits and even stationaries. But has the banking sector reaches such a depression stage? There’s no more bailout in a very big-scale, is there? Cisco might thought it would be a good idea to sound the alarm early as not to disappoint the ever-hungry wolves’s (investors) high expectation. Little did it realize it actually had caused the panic and blood-shed all over the trading floor.
It wiped out $12 billion out of Google Inc.’s market value and $9 billion from Apple Inc. Other great soldiers who lost the battle: IBM Corp., down $4.97 (4.5 percent) to $106.11; eBay Inc., down $1.29 ( 3.8 percent) to $32.40; Oracle Corp., down $1.75 (7.9 percent) to $20.35; Baidu.com Inc., down $37.13, (9.4 percent) to $357.87.

The fact is the banking companies still need to buy the necessary technology equipments or programs in order to compete or to enhance their existing operation problems. They might just stretch the project into multiple phases but to scrap in totality might be too exaggerated. History has shown that the fastest and efficient way to bring up the bottomline is to chop the staffs’ strength. So for the technology stocks to plunge (to continue?) as if it’s the technology bubble instead of housing bubble that was actually burst is tantamount to present good opportunity to investors to scoop at a very attractive stock prices.

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November 9th, 2007 by financetwitter

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