Bursting Tech Bubble Will Spread to the Broader Economy

Apollo Chief Economist

The first chart below shows that many tech stocks are down 70%-80% from their peaks, the second chart shows how SG&A spending for many of these companies has increased dramatically in recent years, and the third chart shows that total employment in these companies has increased from around 300,000 in 2019 to about 450,000 today. The bottom line is that the bursting tech bubble will have significant negative consequences for the broader economy through layoffs, less spending on rents, and less spending on advertising. 

Table showing significant percentage declines in the stock prices of 81 tech/tech-related companies
Table showing large increases in SG&A expense in recent years
Source: Bloomberg, Apollo Chief Economist (Note: SG&A is defined as the sum of all direct and indirect expenses (such as advertising expenses), general and administrative expenses (including rental expenses).
Chart showing large increases in hiring in recent years for the 81 firms with significant drops in stock prices
Source: Bloomberg, Apollo Chief Economist

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