The FAANG Sell-off
Facebook, Amazon, Apple, Netflix, and Google are together known as the FAANG stocks in the stock market. These stocks have been the darling of the market for the past decade or so. Almost every investor has some of these stocks in their portfolio. However, it seems like the bull run for these stocks is over.
In the latest crash which happened in Oct and Nov 2018, the FAANG stocks have been the worst hit. In fact, these stocks have a lost a combined net worth of over $1 trillion during this downfall. Since the value of these shares has fallen more than 20% from their peak valuation, it would now be safe to say that these companies are in a bear phase. The panic has started seeping to the other sectors of the market, and it doesn’t seem like the suffering is about to end anytime soon. After the fallout of the tech sector, the energy sector has also taken a beating.
In this article, we will have a closer look at what led to this tragic reversal of fortunes. Why are investors suddenly bearish about the FAANG stocks and want to get rid of them as soon as possible?
Concerns Facing Each of the FAANG Companies:
Also, it has come to light that Google is building a separate search engine for the market in China. This search engine will work as per the censor norms decided by the Chinese government. As a result, it will not show the results of human rights violations and religious abuse in China. Events like these are spoiling the image of Google as well. The stock price of Google is very sensitive towards the perception of its brand image. This is the reason why the stock has been on a downward trajectory in the recent past.
The events mentioned above are catalysts which are causing the FAANG stocks to decline in value. However, these are not the events that are truly causing the fall. It seems like the market has suddenly realized that too much money is stuck in FAANG stocks. Most of these stocks have market value is which is 150x their current revenue. This obviously means that they are overpriced in the first place which is why the market is correcting the prices as and when it gets a chance.

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