This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Janet Yellen Warns on 'Stretched' Social Media Valuations

NEW YORK ( TheStreet) -- Social media stocks took a huge bump Tuesday following Federal Reserve Chair Janet Yellen's remarks the sector's valuation is overstretched.

In prepared remarks addressing the Senate Banking Committee, Yellen noted, "Valuation metrics in some sectors do appear substantially stretched-particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year."

The valuation of high-momentum public technology companies, such as Twitter (TWTR - Get Report) and Facebook (FB - Get Report), as well as private but much-hyped companies, like Uber and Snapchat, have led to concerns of a Silicon Valley bubble. Uber, for instance, was valued at $17 billion last month, surpassing the market capitalization of far more entrenched players such as Hertz (HTZ) and Avis Budget (CAR).

Yellen's comment have triggered a sell-off among many high-profile names in the sector. In mid-morning trading, Facebook had fallen 2.3%, Twitter was off 1.2%, Yelp (YELP - Get Report) fell 4.9%, and LinkedIn (LNKD - Get Report) dropped 1.3%.

FB Price ChartFB Price data

by YCharts TWTR Price ChartTWTR Price data by YCharts

LNKD Price ChartLNKD Price data by YCharts

YELP Price Chart YELP Price data by YCharts

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
FB $95.21 -1.84%
LNKD $226.60 -2.30%
TWTR $31.49 0.80%
YELP $26.02 3.90%
AAPL $122.37 -0.50%

Markets

Chart of I:DJI
DOW 17,745.98 -5.41 -0.03%
S&P 500 2,108.63 +0.06 0.00%
NASDAQ 5,128.7850 +17.0520 0.33%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs