Recently, for the major Internet companies is really a difficult day, on the one hand, the major Internet manufacturers lay off employees, optimization of the voice continues, high-paying Internet manufacturers have become the past tense, on the other hand, the stock price of The Chinese stock market continued to fall, many people have appeared in the problem of luxury cars into bicycles, in the face of the current decline in Chinese stocks, the big factories holding equity in the face of shrinking wealth in the end what to do?
First, the Chinese stock market fell sharply and the wealth of large factories shrank
In the past for a long time, the U.S. stock market for China's Internet companies are extremely dreamy place, to the NASDAQ bell ringing how many Chinese Internet people dream, but just in the recent period, the successive sharp declines in Chinese stocks have aroused widespread concern in the market, according to Tiger Sniff's report, as of March 25, 281 Chinese stocks listed in the United States, The total market capitalization is about $1.19 trillion, of which 196 are Chinese stocks with a market capitalization of less than $500 million (136 are Chinese companies with a market capitalization of less than $100 million), and the total market capitalization of these companies is a total of $19.5 billion. In other words, the total market capitalization of 70% of the Chinese stocks accounts for only 1.6% of the total plate.
According to the statistics of Titanium Media, February 2021 to the present, is more than a year for Chinese stock investors to look back. Taking the NASDAQ China Technology Stock Index as an example, from February 17, 2021 to March 15, 2021, the index fell from 4533.41 to 1348.32, a decline of 70%! Other indices and ETFs are roughly the same picture.
Since February 17, 2021, it is common for the market value of 105 major new economy Chinese stock companies to evaporate by 90%. Specific data: the median decline of the highest decline was 87.5%, 89 fell more than 70%, 76 fell more than 80%, and 42 fell more than 90%. To name a few of the most serious examples:
The cloud computing industry's "Kingsoft Cloud" fell the highest by 96.5%; the world's first real-time interactive cloud service provider [Soundnet] fell by 93.7%; the first stock of the AIOT platform [Tuya Intelligence] fell by 93.7%; the real estate intermediary leader [Shell] fell by 90.5%; and the circle-breaking comprehensive community [Station B] fell by 90.3%.
In the face of the plunge in Chinese stocks, the Internet factories that have always liked to use equity incentives to pay employees are also facing huge pressure, and a recent article titled "The chinese stocks are fluctuating, the big factories holding the stocks: "Ma"" has caused heated discussion in the entire Internet circle, and more and more large factories are facing the equity in their hands that are becoming more and more worthless, becoming more and more economical, dare not buy expensive things, and even strawberries dare not buy big to eat.
On March 22, Alibaba announced that it would continue to expand its repurchases, expanding the size of its share repurchase program from $15 billion to $25 billion, which also set a record for the repurchase of Chinese shares. Tencent bought back 838,000 shares on March 25. Among them, the highest price of the repurchase was HK$365/share, and the lowest price was HK$352.8/share, costing about HK$300 million.
However, in the face of sluggish stock prices, the effect of buybacks aside, how many Chinese-listed companies can really come up with money?
Second, what should the large factory personnel who continue to shrink their equity do?
To be honest, in the face of the continuous shrinking of the equity of large factories, how should we look at this matter? What about the big factory people?
First of all, the continuous shrinkage of Chinese stocks is the result of multiple reasons. In recent years, Chinese stocks in the capital market can be described as the day in the sky, a variety of Chinese stock companies whether it is making money or not making money, as long as they go to the NASDAQ market, the immediate market value of billions of billions of dollars, resulting in the emergence of many Internet billions of dollars, under the influence of this wealth-making effect, many Internet companies have rushed to the United States to become a member of the Chinese stock army, but in that era of fiery cooking oil, blossoming, no one will consider how much money the Chinese stocks really made? Is it worth so much money? However, this is already a metaphysical question, and it is also an hindsight to ask now, but how many bubbles there are so many Chinese stock companies, I believe this is already a question that cannot be answered. After that, with a series of internal and external changes, the situation of Chinese stocks has become increasingly difficult, and some smart companies have begun to choose to return to Hong Kong for listing, although it has a certain effect, but it cannot reverse the market trend of the decline of Chinese stocks, so we see that from 2021, Chinese stocks have flowed all the way down. Especially this year, affected by a series of bearish factors such as multiple market panics and Interest Rate Hikes by the Federal Reserve, Chinese stocks have fallen sharply one after another, and finally formed the trend of the market that people in the big factories now see. So, the reason for the decline is actually here.
Second, Chinese stocks fell less than the market did not believe in tears. Compared with the problem of the decline of Chinese stocks, in fact, the core logic is that the capital market no longer believes in the story, if you can not come up with real money and silver performance, Chinese stocks are likely to be abandoned by the market, so in this case, the decline of Chinese stocks is the role of the capital market return. But for most of the big factory people, compared to the shrinkage of their own wealth, the current competitive pressure may be more serious, Internet companies are not so profitable, not so rich, many previously dispensable positions are also dangerous, so we see that the Internet factories are reducing staff and increasing efficiency, by laying off inefficient personnel to reduce their operating costs, so the double blow of wealth and competitive pressure superimposed together, may be the current Crisis in china stocks further extended out of the problem.
Third, what should we think in the face of shrinking wealth? For most big factory people, in the face of the current crisis, there may be several preparations:
The first is to constantly exercise the ability to leave at any time. In fact, behind the Crisis of Chinese Stocks is the pressure of Internet transformation, many Internet manufacturers are actually facing the pressure of the job market, because so high wages are actually only affordable by large factories, and now many large factories are optimizing, the market can provide very few jobs, in this case, if only pay cuts to leave, mortgage pressure, life pressure will surge instantaneously, by the luxury of frugal ratchet effect will make many people difficult to bear, in such a case, there may be a sense of crisis, The ability to leave a big factory at any time, this ability exercise may be available at any time.
The second is to consider more wages and less equity in work and life. For the people of the big factory, it is now necessary to have a tight life thinking, in the work, life only to their own salary to consider the choice of lifestyle, rather than adding equity to consider, so that it will be easy to lower their threshold, so as to help the big factory people further find the right way of life, even if the fluctuation will not affect life too much.
The third is to further emphasize long-term value from the perspective of value investment. The current Internet company will definitely face a period of value reshaping, how long this period may not be able to give you an accurate answer, but if your company can find the direction of the future, such as grasping the consumption trend of Chinese, grasping the direction of the industrial Internet, grasping the possibility of emerging economy going to sea, the possibility of its value reconstruction will undoubtedly be greater, such a company stock is actually worth holding for a long time.
I have to admit that the current and future period of time is a relatively difficult time period for large factories, and how to grit your teeth and stick to the past may be a problem that every big factory must consider carefully.