Tech stocks fall in wake of Budget
- 11 May, 2000 12:49
A bloodbath befell the ASX yesterday, the nation's first day under a federal Budget which ignored IT industry concerns, and few tech stocks were spared.
IT stocks were arguably the hardest hit by last month's market correction, and industry spectators may have seen an industry-overlooking Budget further solidifying rising marketplace fears that technology is not a viable investment.
With an All Ords drop of 42.8 points, to 3011.8, together with an ASX 200 fall of 42.7 points, share prices in bread-and-butter tech companies such as Sausage Software, Solution 6, Eisa and BMCMedia continued to plummet, suggesting that a return to business as usual for these down under dotcoms is still far down the track.
With the federal government yesterday placing further emphasis on the sale of the remainder of Telstra, shares in the telco giant dropped for the seventh consecutive day, closing at $6.61. The telecommunications index fell 62.4 points, to 1741.5.
After an emotional press conference and extraordinary yesterday where Solution 6 CEO Chris Tyler confronted his chequered professional past for the first time publicly, shareholders reacted by promptly stripping almost 17 per cent off the company's share price, closing at $3.42 per share -- little more than one-sixth of the dizzying heights the company's shareholders enjoyed just last year.
That company's newly estranged business affiliate, Sausage Software, hit similar depths of marketplace despair, with Sausage shares falling more than 16 per cent, closing at a sorrowful $2.03 per share -- around one-quarter of the internet software developer's share price of earlier this year, when Solution 6 announced its intention to swallow Sausage whole.
Similarly, BMCMedia, as well as Eisa, which earlier this year lodged a bid to purchase ISP OzEmail for an estimated $350 million, dipped noticeably in market value. BMC shares slid almost 6 per cent, to $1.65, and Eisa shares slid 13 per cent to $1.07. SecureNet experienced a decline of 14.5 per cent, closing at $6.70 per share.