Tech Stocks Hemorrhaged Value in 2008By Kathleen A. Martin | Print
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Microsoft, Cisco, VMware and other publicly traded technology stocks weren't immune to the troubled economy. More than one-third of publicly traded technology vendor and solution providers saw their stock values tumble more than 51 percent in 2008.
Wall Street closed out 2008 with a 100-point gain, but nothing could save technology stocks. In 2008, the leading technology vendors saw double-digit losses, with 30 percent of the companies seeing losses greater than 51 percent.
Nortel (NYSE: NT) has watched its stock drop from $14.95 to $0.26 in the last 12 months and is on notice from the New York Stock Exchange (NYSE) to be delisted if it cannot raise the stock above $1.
BT Global Services (NYSE: BT) was also down 97 percent. In 2008, the stock opened at $53.16 and closed the year at $1.35. The company’s stock was recently downgraded by JPMorgan.
ManTech International (NASDAQ: MANT) was the year's big winner, up 28 percent. NTT Data (NYSE: NTT) closed up 9 percent, Affiliated Computer Services (NYSE: ACS) finished up 5 percent, and Perot Systems (NYSE: PER) finished up 3 percent for 2008.
A closer look at a few of these stocks by technology included the following summaries:
If only color laser printers could print money. Xerox (NYSE: XRX) lost 50 percent of its stock value to close 2008 at $7.97. Lexmark International (NYSE: LXK) and Hewlett-Packard (NYSE: HPQ) were both down a mere 20 percent.
Direct Market Resellers
The online marketers took a beating in 2008. Insight Enterprises (NASDAQ: NSIT) was down 61 percent to close at $6.90. PC Mall (NASDAQ: MALL) and PC Connection (NASDAQ: PCCC) finished the year down 54 percent at $4.01 and $5.12, respectively.
Among the big technology distributors, Tech Data was the loss leader. Its stock was down 52 percent for the year. Arrow Electronics (NYSE: ARW) tumbled 51 percent, Synnex (NYSE: SNX) dropped 40 percent, and Ingram Micro (NYSE: IM) fell 24 percent.
The big IT vendors were not immune to market volatility. Despite relatively healthy sales, revenues and cash reserves, many of the big hardware and software vendors posted significant year-over-year losses.
Despite billions of dollars in cash reserve and a healthy recurring software licensing revenue stream, Microsoft (NASDAQ: MSFT) saw its stock tumble nearly 45 percent in 2008. Its failed bid to acquire Yahoo and troubles with the Vista operating system didn’t help bolster perceptions among traders.
Cisco Systems (NASDAQ: CSCO) continues to pump out new initiatives in networking, voice/telephony, security and telepresence. Nevertheless, the networking market leader saw its stocks fall nearly 39 percent last year.
After a decade of near flawless performance, Google’s armor was kinked by the troubled economy. After hitting highs above $700 per share, the search engine giant saw its stock value plummet 55 percent in 2008.
Dell couldn’t reverse its sagging fortunes by re-entering the channel in 2008. The computer and server manufacturer saw its stock price fall 55 percent year over year. The good news for Dell: Channel revenues continue to increase as thousands of solution providers sign up for its program.
And despite the continued frenzy over virtualization, VMware couldn’t escape the receding tide. Knocked around by the sudden departure of its CEO and founder Diane Greene and speculation over the impact Microsoft’s Hyper-V will have on its business, VMware’s stock spiraled 72 percent year over year.
The following is the year-over-year stock performance for the leading publicly traded technology vendors and solution providers.
Leading Technology Vendor Stocks
Jan. 1, 2008
Dec. 26, 2008
|Adobe Systems (ADBE)||36.03||21.29||-40.90%|
|Arrow Electronics (ARW)||38.8||18.84||-51.40%|
|BMC Software (BMC)||34.7||26.91||-22.40%|
|Check Point (CHKP)||21.87||18.99||-13.20%|
|Cisco Systems (CSCO)||26.54||16.3||-38.60%|
|Citrix Systems (CTSX)||38.05||23.57||-38.10%|
|Data Domain (DDUP)||26.01||18.8||-27.70%|
|Ingram Micro (IM)||17.8||13.39||-24.80%|
|Juniper Networks (JNPR)||32.1||17.51||-45.50%|
|Nortel Networks (NT)||14.95||0.26||-98.30%|
|Red Hat (RHT)||20.71||13.22||-36.20%|
|Research in Motion (RIMM)||113.71||40.58||-64.30%|
|Seagate Technology (STX)||24.44||4.43||-81.90%|
|Sun Microsystems (JAVA)||17.42||3.82||-78.10%|
|Tech Data (TECD)||37.2||17.84||-52.00%|
Leading Solution Provider Stocks
Jan. 1, 2008
Dec. 26, 2008
|BT Global Services||53.16||1.35||-97.50%|
|Citigroup - Transaction Services||28.92||6.71||-76.80%|
|Insight North America||18||6.9||-61.70%|
|NTT Data Corp||24.79||27.19||9.70%|
|Tata Consultancy Services||918||496.65||-45.90%|