Which Technology Stocks Will Survive the Current Market Rout?

Dear Reader,


We are experiencing a real market meltdown with major US stock market indices down circa 17% from their recent highs in three weeks.

Large technology stocks like Apple, Amazon, Google, Microsoft and Amazon have been the outperformers in the US stock market since 2009. Other smaller technology companies like Twitter, Tesla, Pinterest, Spotify, Dropbox, Box, Lyft, Uber have been listed and are trading at very high Price/Earnings and Price/Sales multiples.

So which technology stocks will survive the current stock market crash? Simple answer: the ones that are making money. Apple, Amazon, Google, Microsoft and Amazon are profitable and should have no trouble surviving the current market fall. Companies like Twitter, Tesla, Pinterest, Spotify, Dropbox, Box, Lyft, Uber etc. are likely to encounter trouble if we enter in a prolonged economic recession. Since these companies are not very profitable or do not make any money at all, they are counting on raising outside capital to survive in most cases. In times of high financial distress, however, investors keep their purses closed and rarely finance any opportunistic investments. The ones that are making money will have their valuation multiples slashed.

A case in point is Tesla. Tesla has consistently relied on raising outside capital to survive. If we have a 2-3 year long recession, Tesla could basically go bankrupt since Tesla is burning through large amounts of cash.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich