Loose Lips Sink Stocks

"There is such an overvaluation of technology stocks, it is absurd," were Microsoft president Steve Ballmer's exact words to reporters after a speech at the conference of the Society of American Business Editors and Writers. "I could put our own company and others in that category." The words left his lips on Thursday morning. By the end of the day, they'd cost his company around $20 billion in market capitalization. Easy come, easy go.

Whatever strange logic drives technology reporters caused them to pick up Ballmer's remarks both on TV and online, and by three o'clock yesterday afternoon the NASDAQ was in full-scale retreat, ending down 108 points at 2750, the fourth largest single-day point drop in its history. Microsoft's decline dragged down a host of other tech behemoths with it, including Intel, Sun, Oracle, Hewlett-Packard and IBM. Ballmer, who first met Bill Gates back when they were undergraduates at Harvard, has taken a larger leadership role in Microsoft over the past year, but nobody realized his influence in the industry had grown to Greenspanian proportions. MORE >>