Magazine article American Banker

Bank Tech Stocks Take It on the Chin

Magazine article American Banker

Bank Tech Stocks Take It on the Chin

Article excerpt

Bank technology stocks nosedived last week as investors searched for safe havens amid unfavorable corporate earnings reports and anticipation of a Federal Reserve rate hike.

"The entire technology sector is very weak," said Gregory M. Gould, an analyst for Goldman Sachs & Co., New York.

"In general you are seeing the higher multiple stocks come under more pressure than the lower multiple stocks," he added.

The Nasdaq composite index, which lists some of the most prominent technology stocks, was down 146 points late Friday. The index has lost more than 11% since setting a record high of 1249.15 in early June.

The Dow Jones industrial average dipped 55 points for the week.

Among the companies that provide services to banks, Cybercash Inc., Reston, Va., has been one of the hardest hit by the downturn. The provider of electronic commerce software saw its stock plunge $12.00 to $35.75 last week on no discernable news.

John F. Powers, an analyst at San Francisco-based Robertson Stevens & Co., said the stock market has grown skeptical of "concept" companies with promising futures but meager near-term earnings prospects. He said Cybercash only recently has begun "to generate tiny bits of revenues."

The stock of Transaction Systems Architects Inc. of Omaha, Neb., also had a tough week. Shares of the electronic funds transfer software maker were trading at $30.50 late Friday, down $6.125 for the week.

Mr. Gould attributed the drop to the company's high price to earnings multiple. …

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