In my view, tech stocks are up, not down. US Fed chairman Alan Greenspan summed it up very well last week when he commented that investors are trying to find the right balance between the Old Economy and the New Economy. Seriously, though, the market havoc creates real problems for CEOs. Secondly, they have assure their own rank and file that their futures are secure. Many employees tend to equate market sentiments with their company's prospects.
Employees can easily conclude that maybe their company is stumbling.
Plummeting stock prices can exacerbate this perception. Companies which had IPOs in the works or even secondary financings and placements pending, are now finding themselves in a very vulnerable position. Expansion plans may have to be cut back or postponed. In the case of junior listings, which count on financings just to stay viable, it means serious dilutions. Just weeks ago companies could name their price.