Barron\'s 03.16.2020

(やまだぃちぅ) #1

8 BARRON’S March 16, 2020


Verizon Communications(VZ), which


also absorbed the AOL platform. Sun Mi-


crosystems was taken over byOracle


(ORCL) in 2010, while EMC was acquired


byDell Technologies(DELL) in 2016.


Other Nasdaq numbers that soared in


the bubble never returned to their previ-


ous glory, even though they’re still around.


Sirius XM Holdings(SIRI) had a nega-


tive total return of 88.83% in the two de-


cades ended March 10, the worst perfor-


mance among the Nasdaq-100, according


to Bloomberg. NetApp (NTAP) had a nega-


tive 57.59% return, followed byIncyte


(INCY) with minus 26.88% over the same


span. Fourth worst wasCisco Systems


(CSCO)—the No. 2 Nasdaq company 20


years ago, in terms of market capitaliza-


tion, and the blue chipof internetstocks—


with a negative 24.09% total return, in-


cluding dividends.


The top Nasdaq name of 2000,Micro-


soft(MSFT), is now neck and neck with


Apple(AAPL) for the lead market-cap


position. Most of its 395.57% two-decade


total return was scored in the past few


years, after a long period of lackluster per-


formance.Intel(INTC), the No. 3 Nasdaq


stock in 2000, returned a wan 40.15%


over the ensuing two decades, while Ora-


cle, No. 4 back then (and now traded on


the NYSE), returned 64.93%, with divi-


dends rather than price increases generat-


ing most of both stocks’ gains.


The biggest Nasdaq winner from 20


years ago wasMonster Beverage


(MNST), with a high-energy total return of


74,588%, followed byO’Reilly Automo-


tive(ORLY), with 7,770.4%. The biggest


tech winner wasAnsys(ANSS), with a


7,381.47% return, followed by Apple, with


7,220.39%.


As Dan sagely observed in compiling


these records, many of today’s biggest tech


winners either weren’t public in 2000 or


didn’t exist.Alphabet(GOOGL) was begin-


ning to dominate the internet, but it didn’t


have its initial public offering until 2004.


Facebook(FB) launched its social media


site in 2004 and had its IPO in 2012.


Hubris can be dangerous. Companies


on top don’t necessarily stay there, with


the new, new thing ready to supplant


them, especially in tech. My recollection of


the bubble era was a loudmouth on my


commuter train bragging that his Sun Mi-


crosystems stock had split again, around


its peak. “Life is gooood,” he blared on his


cellphone. “Sic transit gloria” remains as


true as ever.B


email: [email protected]


guesses for the second quarter call for a


mild contraction of 1% to 2%, far less than


what the profound changes in Americans’


lives imply (although the insane panic buy-


ing of toilet paper alone could add to


GDP). Then they predict a gradual recov-


ery, ramping up as the warm weather lets


the virus pass. We’ll see.


In the absence of significant fiscal ac-


tion, all eyes again fall on the Fed. This


past week, the central bank sharply


ramped up its liquidity provision to offset


severe dislocations in the Treasury market.


These supposedly risk-free assets failed to


provide a cushion against riskier corporate


equity and debt securities as liquidity


dried up.


Futures markets expect the central


bank to slash its federal-funds policy rate


another full percentage point, back to the


crisis level of 0% to 0.25%, on Wednesday,


at the conclusion of its policy meeting.


With monetary policy near its limit, fiscal


actions beyond what have already been


announced seem necessary to counter the


likely effects of the big changes in how we


work and live during the pandemic. But


zero interest rates hardly seem the cure for


a pandemic.


T


his past week’s market plunge


obscured the 20th anniversary


of another major market event,


the peak of the Nasdaq tech bub-


ble on March 10, 2000.


That was supposed a once-in-a-millen-


nium moment of madness, never to be


repeated after the bitter lessons of bidding


up internet wunderkinds lacking earnings


or, in some cases, even much revenues, just


“eyeballs” looking at their sites. This past


year saw the ascent of the likes ofTesla


(ticker: TSLA) andVirgin Galactic Hold-


ings(SPCE). At least the electric-auto pio-


neer wisely took advantage of its stock’s


nearly fivefold increase from last May to


raise $2 billion in fresh equity near its Feb-


ruary peak to shore up its balance sheet


and ensure its long-term financial viability.


Some of the biggest names of the class


of 2000 no doubt wish they had been


equally prescient. With the help of our


researcher extraordinaire, Dan Lam, we


found that some of the names that loomed


large in the Nasdaq-100 index remain, but


as mere shadows of their former selves,


such as AOL, which merged with Time


Warner in what may be the worst deal in


corporate history. Yahoo! became Altaba,


with stakes inAlibaba Group Holding


(BABA) andYahoo! Japan(YAHOF),


while Yahoo!’s internet assets were sold to


Up & Down Wall Street Continued


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