To see why a levelling of tech valuations has the capacity to terrify even staunch stock bulls, consider the hyper-speculative software makers at the centre of the recent equity storm.
Those firms have suffered what is by any measure a pummeling in the last few weeks following the hawkish shift by the Federal Reserve. The tech shares lost a third of their value when measured via indexes compiled by Goldman Sachs Group Inc.
And yet even with those losses behind them, the group -- a basket of companies for whom profitability has in many cases yet to materialize -- still trades at 16 times sales. That’s almost three times the multiple of the Nasdaq 100 Index.