‘Cash is king’ as tech shares take a big hit

WITH tech stocks falling by $1.6 trillion and shares in companies such as Facebook, Netflix, Amazon and Google plummeting, Sir Tom Hunter has voiced his concern this is indicative of the boom or bust nature of capitalism.

He said: “I’ve been through a few recessions, more than I care to remember. Coming out of the last financial crisis, governments around the world wanted to go for quantitative easing and money was cheap. Therefore the stock market said it was going to reward companies who were growing: they valued growth over profits.

“There’s this term in the American vernacular called blitzscaling, which meant people like Peloton, Netflix and Uber were growing at any cost. For a while, that was valued, especially on the US stock market. Well, guess what? All good things come to an end.

“Believe you me, the bubble has burst. I go back to the tried-and-tested theory that cash flow is king and cash flow in some of the companies I’m still buying is in Apple, Microsoft and Alphabet.”

Lord Willie Haughey also voiced his concerns about the markets and the fact some people know how to manipulate social media to prop values behind companies.

“We have waxed lyrical about how we admire Elon Musk,” he said. “He’s the greatest example of the good and the bad of how to use social media.

“So here is a guy who sets up a company, who very quickly becomes on paper the richest guy in the world. But here is a guy who made a statement that killed the value of his company. He made another statement that increased the value. This is bonkers, right?”

With Bitcoin currently spiralling, he added: “Right now I wouldn’t invest in anything not asset-backed.”