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Today in the Market (8/18/2023)

Good Evening! On Friday, U.S. stocks initially experienced significant losses but managed to recover later on. However, the overall performance for the week was marked by sharp drops as Wall Street continued to face a downward trend in August.

Even with the recovery, S&P 500 and Nasdaq Composite still finished the week off in the red by 0.01% and 0.20%, respectively. The Dow Jones finished up in the green by 0.07%.

1-FOR-40?!

WeWork Inc. (WE), the financially distressed co-working business on the verge of bankruptcy, is proceeding with a 1-for-40 reverse stock split as a strategic measure to preserve its listing on the New York Stock Exchange. This is also because the stock has seen a significant decline of 99% after the company’s first public offering in October 2021, resulting in the eradication of $9 billion in market capitalization.

Why are they doing this? The New York Stock Exchange enforces a minimum closing price of $1 per share, and the use of reverse splits is a common approach adopted by penny companies to maintain their listings. Which… The stock has seen a significant decline of 99% after the company’s first public offering in October 2021, resulting in the eradication of $9 billion in market capitalization. and ending the day at $0.14.

The reality…  WeWork has made persistent efforts to convey a narrative of transformation, in which the innovative co-working startup evolves into a financially viable and sustainable entity as a publicly traded firm. However, the company has been experiencing significant financial losses. Additionally, a significant amount of clients who have subscribed to their office leasing services are terminating their memberships in large quantities.

ROUGH TIMES

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The stock market’s challenging performance in August has resulted in increasing losses for some major gainers of the year, often known as the Magnificent Seven. In aggregate, the market capitalization losses are approaching a value of $1.5 trillion.

  • Apple Inc. (AAPL) finds itself in possession of the largest decline in value from its highest point over the course of 52 weeks. The company has seen a decline of 12.2%, resulting in a decrease of $379 billion in market capitalization.
  • Microsoft (MSFT) has had a decline in return with a decrease of 13.6%. However, it has incurred a comparatively lower loss in market capitalization, amounting to $371 billion.
  • Tesla (TSLA) has seen a decline of almost 30% from its highest value in the last 52 weeks, amounting to over $300 billion.
  • Nvidia (NVDA), has seen a decline of almost 10%, resulting in a substantial market capitalization loss of $117 billion.

However… Alphabet (GOOGL, GOOG) and Amazon (AMZN) stand out as exceptional cases since their market capitalization losses have not exceeded $100 billion. The Alphabet stock has had a decline of 6.7%, while the Amazon stock has witnessed a decrease of 5.4% from their respective recent peak values.

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