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Tech Stocks Hemorrhaged Value 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 […]

Written By

Kathleen A. Martin

Jan 5, 2009

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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:

Laser Printers
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.

Distributors
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.

Bellwethers
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
Company	Jan. 1, 2008	Dec. 26, 2008	Difference
Adobe Systems (ADBE)	36.03	21.29	-40.90%
Adtran (ADTN)	20.92	14.88	-28.90%
Alcatel-Lucent (ALU)	7.25	1.53	-78.90%
AMD	7.14	2.16	-69.70%
Apple (AAPL)	194.84	85.35	-56.20%
Arrow Electronics (ARW)	38.8	18.84	-51.40%
Avnet (AVT)	34.62	18.21	-47.40%
BMC Software (BMC)	34.7	26.91	-22.40%
CA	24.55	18.53	-24.50%
Canon (CAJ)	45.72	31.4	-31.30%
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%
Dell	24.39	10.24	-58.00%
EMC	18.02	10.47	-41.90%
FalconStor (FALC)	10.74	2.78	-74.10%
Google (GOOG)	685.19	307.65	-55.10%
HP (HPQ)	45.65	36.29	-20.50%
IBM	104.69	84.16	-19.60%
Ingram Micro (IM)	17.8	13.39	-24.80%
Intel (INTC)	25.35	14.66	-42.20%
Juniper Networks (JNPR)	32.1	17.51	-45.50%
Lexmark (LXK)	33.94	26.9	-20.70%
McAfee (MFE)	35.79	34.57	-3.40%
Microsoft (MFST)	35.22	19.44	-44.80%
Motorola (MOT)	16.07	4.43	-72.40%
NetApp (NTAP)	24.62	13.97	-43.30%
Nokia (NOK)	37.4	15.6	-58.30%
Nortel Networks (NT)	14.95	0.26	-98.30%
Novell (NOVL)	6.68	3.89	-41.80%
Oracle (ORCL)	22.49	17.73	-21.20%
Polycom (PLCM)	26.94	13.51	-49.90%
Rackspace (RAX)	10.01	5.38	-46.30%
Red Hat (RHT)	20.71	13.22	-36.20%
Research in Motion (RIMM)	113.71	40.58	-64.30%
Salesforce.com (CRM)	60.98	32.01	-47.50%
SAP	50.73	36.22	-28.60%
ScanSource (SCSC)	32.03	19.27	-39.80%
Seagate Technology (STX)	24.44	4.43	-81.90%
Sun Microsystems (JAVA)	17.42	3.82	-78.10%
Sybase (SY)	24.63	24.77	0.60%
Symantec (SYMC)	16.06	13.52	-15.80%
Synnex (SNX)	19.03	11.33	-40.50%
Tech Data (TECD)	37.2	17.84	-52.00%
VeriSign (VRSN)	37.17	19.08	-48.70%
VMWare (VMW)	84.6	23.69	-72.00%
Websense (WBSN)	16.84	14.97	-11.10%
Xerox (XRX)	15.82	7.97	-49.60%

Leading Solution Provider Stocks
Company	Jan. 1, 2008	Dec. 26, 2008	Difference
Accenture	36.06	32.79	-9.10%
Acxiom	11.15	8.11	-27.30%
ACS	43.61	45.95	5.40%
Atos Origin	27.95	17.92	-35.90%
ADP	43.22	39.34	-9.00%
BT Global Services	53.16	1.35	-97.50%
CACI	43.14	19.98	-53.70%
Cerner Corp	56.72	45.09	-20.50%
CGI Group	11.06	7.8	-29.50%
Citigroup – Transaction Services	28.92	6.71	-76.80%
CSC	47.45	35.14	-25.90%
Convergys Corp.	16.04	6.41	-60.00%
Fiserv	55.26	36.37	-34.20%
Harris Corp	61.87	38.05	-38.50%
Insight North America	18	6.9	-61.70%
ITT Defense	63.88	45.99	-28.00%
Lockheed Martin	105.35	84.08	-20.20%
ManTech	42.33	54.19	28.00%
McKesson	63.91	38.73	-39.40%
Metavante	22.33	16.11	-27.90%
Northrup Grumman	78.6	45.04	-42.70%
NTT Data Corp	24.79	27.19	9.70%
OfficeDepot	13.51	2.98	-77.90%
OfficeMax	20	7.64	-61.80%
PCConnection	11.28	5.12	-54.60%
PCMall	8.9	4.01	-54.90%
Perot Systems	13.19	13.67	3.60%
QinetiQ	199	158.75	-20.20%
Raytheon TSC	60	51.04	-14.90%
SAIC	19.43	19.48	0.30%
Siemens	157.14	75.75	-51.80%
SRA International	28.8	17.25	-40.10%
Staples	22.2	17.92	-19.30%
Systemax	19.41	10.77	-44.50%
Tata Consultancy Services	918	496.65	-45.90%
Unisys	4.58	0.85	-81.40%
WiPro Infotech	14.42	8.13	-43.60%

Tech Stocks Hemorrhaged Value in 2008

Kathleen A. Martin

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