Global Tech Sector in Free Fall This Morning: Lenovo Stock Suspended; India Meets it's Bernie Madoff [View All]

[leveymg]

HONG KONG, BANGALORE - January 7, 2009. Stock trading in Lenovo was suspended on the Hong Kong exchange in sell-off in anticipation the company was on the verge of a major downsizing and restructuring of its global operations. Lenovo, which bought out IBM's PC operations, is the world's 4th largest manufacturer of laptop computers, and still operates in the United States. Meanwhile, the Indian off-shoring industry is also being hammered. Barron’s TechTrader Daily reports in a companion article this morning:

Satyam Computer Services (SAY) shares will open down more than 90% this morning, following the revelation that the company’s founder and now-resigned chairman, B. Ramalinga Raju, has confessed to cooking the company’s books. That’s shaken investor faith in other Indian IT outsourcing stocks.

In short, Satyam now looks like the Indian version of Enron, and Raju has become the country’s Bernie Madoff. It’s not good for the Indian stock market, and it is not good for IT services group.

Ergo, in pre-market trading:

• Cognizant (CTSH) is down $1.44, at $18.
• Infosys (INFY) is down $1.21, at $25.39.
• Wipro (WIT) is down 75 cents, at $7.66.
• Patni (PTI) is down 18 cents, at $5.80.
And Satyam is down $8.53, or 91.2%, to 82 cents.

This appears to be a race to the finish at Ground Zero. Fraud is racing jobs loss is racing declining investor confidence to the bottom in the globalized economy. We all lose.

This is not a drill. Take immediate shelter.
____________________________
See, Eric Savitz, Baron’s Online, TechTrader Daily, Lenovo Shares Halted; Big Restructuring Ahead? , (January 7, 2009), http://blogs.barrons.com/techtraderdaily/2009/01/07/lenovo-shares-halted-big-restructuring-ahead/

Ibid., http://blogs.barrons.com/techtraderdaily/2009/01/07/satyam-off-90-plus-other-indian-it-stocks-sliding/