Is the stock market a casino roulette? Asks Uday Kotak after tech crash

NEW DELHI: As the carnage in US tech stocks eroded over $200 billion of Wall Street wealth, billionaire banker Uday Kotak on Friday drew parallels of the functioning of the stock market with that of a casino roulette.

“Facebook Meta dropped another 25% on Thursday. Amazon stock may follow suit on Friday. Is the stock market a platform for fair price discovery and capital provider to the economy, or a casino roulette?,” Kotak tweeted.

A disappointing result season sent Facebook-owner Meta Platforms stock plummeting 25%. Investors are spooked by Facebook’s costly metaverse bets and the impact of soaring inflation on ad spending. On the other hand, Amazon shares fell 17% in extended trading after the retail and technology heavyweight projected a holiday slump that would leave current-quarter sales below Wall Street estimates.

“Like most US companies the dollar is also playing havoc with Amazon’s future guidance, with it too being cut as a result of the greenback. We are also seeing lower margins as a result of Prime deals and consequently Amazon will be operating in a difficult environment for a while yet,” said Ben Barringer, equity research analyst at Quilter

.

The calendar year 2022 has been a forgettable one for the Big Tech. Meta shares are down around 71% year-to-date, Netflix 50%, Tesla 44%, Alphabet 36%, Amazon 34% and Apple 20%.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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