What's Next for Technology Stocks as Facebook and Dell Suffer Significant Losses?

LONDON, May 28, 2012 /PRNewswire/ --

Less than a week after the launch of its high profile IPO, social networking giant Facebook has landed itself in hot water over allegations that the company issued a 'false and misleading' prospectus ahead of its IPO launch last Friday.

Below, we discuss how Facebook has failed to live up to expectations and how you can spread bet on their share price with Finspreads.

Facebook Fails to Dazzle

Facebook's larger than life debut witnessed a buyer frenzy of sorts, with investors fearing that a new technology bubble - version 2.0 - may be in the making.

The company has failed to dazzle, however, with Facebook shares sliding by around 18% on Tuesday from its IPO price of $38 to $31.

Technology bellwether Dell has shared some of this pain after the company's stocks tumbled 17% on Wednesday, May 23, after posting poorer-than-expected fiscal Q1 profits.

The heavyweight stock has dragged down others with it, with Intel Corp and Microsoft racking up falls of between 2.18 % and 2.27% respectively on the same day.

Technology stocks in a false bubble?

Facebook's dismal performance may have left many bitterly disappointed, but the stock offered fresh investors hope after the company's share price scuppered two straight days of falls to close up 3.2% at $32 per share on Wednesday.

The recent rough and tumble in the technology sector begs the question: have technology stocks been building themselves up in a false bubble, or is the sector simply pausing for breath before it resumes its rally higher?

Traders keen to make a buck from rapidly changing prices can spread bet the technology sector with a Finspreads account. Spread betting is an alternative to conventional shares dealing which enables you to profit irrespective of whether stock prices are moving up or down.

Profit from rising as well as falling share prices

With spread betting, traders can net tax-free profits* from fluctuating stock price movements of over 12,000 financial instruments including shares, indices, currencies, commodities and metals.

To net a profit, you simply need to apply and open an account with a provider such as Finspreads, and determine whether you expect the price of your chosen instrument (let's say Dell shares for example) will rise or fall in the coming days.

If for instance, based on its recent dismal report, you expect Dell shares to continue falling lower, you taka a short spread betting position on Dell shares.

Alternatively if you believe that the current pessimism surrounding technology stocks is short-lived and that Dell shares will climb higher in the days to come, you go long (or buy) Dell shares. If you were right and prices move in the direction you had expected, you net a profit. If not, you make a loss.

Summary

Spread betting offers numerous advantages over conventional shares dealing and is especially beneficial during volatile market conditions. Find out more about the benefits of spread betting with Finspreads.  

Spread betting is a leveraged product which can result in losses greater than your initial deposit. Ensure you fully understand the risks before you start trading.

*Spread betting is currently exempt from UK stamp duty and Capital Gains Tax (CGT). However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.

About Finspreads:

Finspreads is a leading online financial spread betting  firm, offering access to thousands of instruments on the world's financial markets.

The company pioneered fully interactive online spread betting in 1999 and continues to invest in technology to ensure that its service remains amongst the market leaders.