What became of the FAANGs?

Facebook, Apple, Amazon, Netflix & Google seemed destined to rule the world

By Morf Morford, Tacoma Daily Index

In many ways, 2022 has been a year of reckoning – not in any kind of moral sense, but as a season of financial correction.

As the year began, the FAANGs (Facebook, Apple, Amazon, Netflix & Google) that seemed poised to rule the world (or at least the economy) appeared unstoppable. By the end of summer, particularly the beginning of fall, most if not all of those companies lost their momentum – many instituting record setting job cut-backs and budgetary re-grouping.

Those companies, of course, are the biggest players. There are hundreds of smaller companies that banked (literally) on pandemic shifts in the economy. From Peleton to Twitter to Tik-Tok, and Zoom, lay offs and cut backs, even bankruptcy and unwelcome mergers have become the new economic terrain.

Call me Crypto

Crypto-currencies have followed along as just another aspect of a bigger sell-off of “risky assets and ventures”, a euphemism for overpriced investment vehicles that always attract speculative buyers. The crypto market has lost a trillion dollars in market capitalization in the past year or so. (That’s about the annual GDP of The Netherlands – the 17th largest economy in the world)

SPACs (special purpose acquisition companies), NFTs and all kinds of similar “magical” cyber-currencies have lost their near-hypnotic appeal.

The rules, landscape and influence (real or imagined) can shift swiftly in these speculative worlds.

Cyber-currency deities can lose billions in a single day – or even a single transaction.

And it’s not just outliers like Kanye West who can lose fortunes within minutes.


FTX is a US licensed cryptocurrency exchange that trades a variety of digital assets like Bitcoin, Ethereum, Solana, and Dogecoin. And Game-Stop. (Remember them?) In other words, the focus of FTX is derivatives and crytpocurrencies.

Or layers of derivatives of derivatives.

In short, what could go wrong?

To inspire your confidence even further, FTX is incorporated in Antigua and Barbuda and headquartered in The Bahamas. As of February 2022, the exchange had over one million users.

It’s a long and complicated story, but here’s a lesson in how to lose more than 15 billion dollars in a day.

As one writer put it, this one-time multi-billionaire is “a king without a throne and without a kingdom”.

I guess that sort of means that a one-time billionaire is more like any one of us.

Speculative, if not delusional, hype has been no match for the harsh headwinds, if not solid wall of slowing economic growth, rising interest rates, and the Federal Reserve ending its latest bout of monetary easing.

Like many individuals, the global financial system is now more leveraged than ever. The next financial meltdown won’t end well for the broader market, especially companies built on outlandish products and a passionate, almost story-book, fantasy narrative of a visionary leader.

The booming (and busting) real estate market

Housing sales, prices, interest rates and construction rates are up, down, up again, down again and up and down again even faster.

And if you think this is crazy for the typical home-owner, renter or potential buyer, or even home loan office, consider the plight of the companies that build their entire business model on stable, or at least moderately predictable costs and profit margins

A few months ago, online real estate brokerage firm Zillow laid off workers and cut back their budget. More recently Seattle-based Redfin announced plans to lay off 862 employees and shut down its house-flipping business.

Apparently the word “flipping” is a bit more accurate (and relentless) than the practitioners had anticipated.

In the past decade or so, housing joined almost every other commodity as just another speculative get-rich-quick scheme.

Our entire economy has come to resemble a casino more than a rational, relatively reliable marketplace.

FAANGs “R” us?

The question, as always, is how representative these companies are for the economy as a whole.

As of August 2021, the FAANGs made up about 20% of the S&P 500. And don’t forget that the S&P 500 is generally viewed as a barometer if not proxy for the United States economy as a whole.

All announced disappointing results in October. As of early November, Netflix share prices dropped by over 50%.

Meta/Facebook fell by over 70%.

Even Apple dropped by almost 18%.

To put it mildly, the ground is shifting under all of these companies.

As one commentator put it if “IBM symbolises dinosaur tech 1.0, so Meta faces the risk of being the next generation fossil.”

Meta has given new meaning to the term “money pit”.

On the scale of the FAANGs, a money pit quickly becomes a black hole, threatening to swallow everything in its proximity.

Investors, users and bystanders, no matter what happens, are in for a wild ride.