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Share prices of global technology and online companies plunge on concerns of overvaluation

The impact of this was also seen on the shares of other social networking services companies — Facebook and Twitter. Their shares have fallen by 9.9% and 12.2%, respectively.

, ET Bureau|
Feb 10, 2016, 04.00 AM IST
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The impact of this was also seen on the shares of other social networking services companies — Facebook and Twitter. Their shares have fallen by 9.9% and 12.2%, respectively.
The impact of this was also seen on the shares of other social networking services companies — Facebook and Twitter. Their shares have fallen by 9.9% and 12.2%, respectively.
ET INTELLIGENCE GROUP: Share prices of global technology and online companies have plunged over the past few days on concerns of overvaluation and slower-than-anticipated growth. In the last two trading sessions, shares of LinkedIn, business-oriented social networking services company, crashed 42%, wiping out nearly $11 billion of the company’s value as its revenue guidance fell sharply below analysts expectations.

The impact of this was also seen on the shares of other social networking services companies — Facebook and Twitter. Their shares have fallen by 9.9% and 12.2%, respectively. Twitter has lost over 70% of its peak valuation, or $33 billion, since its peak in April 2015. LinkedIn, Facebook and Twitter are, however, not the only companies which are feeling the heat.

Shares of e-tailing firms Amazon and Alibaba have plummeted over 25% in the past three months. Apple has also seen its share price decline 23% in the past three months. Netflix, which recently got launched in India, has seen its value erode 27.5% over the same period.

According to experts, these companies are very richly valued but are not witnessing growth as expected.

Besides, a potential rate hike by the US Fed could hurt. Many of these companies were borrowing at lower interest rates and buying back their own shares, thus keeping the share prices high.

Indian tech firms such as Justdial and 8k miles too, have lost 40% and 20%, respectively in one month.
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