Facebook Inc (NASDAQ:FB), Tesla Motors Inc (NASDAQ:TSLA), Twitter Inc (NYSE:TWTR), LinkedIn Corp (NYSE:LNKD) and several other tech momentum names are getting slammed today. LinkedIn is down 5%. Losses in Tesla Motors Inc (NASDAQ:TSLA) reached 8% and losses in Facebook Inc (NASDAQ:FB) exceeded 3%. Twitter Inc (NYSE:TWTR) lost more than 4%. One of last month’s hot stocks, FireEye Inc (NASDAQ:FEYE) is down more than 6%. Hedge fund favorites Rackspace Hosting, Inc. (NYSE:RAX) and SunEdison Inc (NYSE:SUNE) are down more 4%.
This may be a little bit of a stretch but at least some of the decline in momentum tech names may be because of the Alibaba IPO this week. There isn’t a lot of new money coming in for richly priced tech names. Alibaba seems to be offered at a discount and is expected to deliver strong returns after its IPO. So, it isn’t surprising to see momentum players to cash in some of their gains in Facebook Inc (NASDAQ:FB), Twitter Inc (NYSE:TWTR), and Tesla Motors Inc (NASDAQ:TSLA) in order to buy Alibaba.
Alibaba is expected to begin trading this Friday. The company may increase its offering and increase its price range later this week. “There is a number and the number is you don’t want to exceed Facebook Inc (NASDAQ:FB) cause actualy a lot of the fundamentals look a lot like Facebook. Facebook 47 times earnings. This one will still be not that expensive” said CNBC’s Jim Cramer this morning about Alibaba. Watch the video below: