Software as a Service Stocks Fall 3.41% for Week Ended Sept. 5
Software as a Service stocks, like the broader US markets, continue to struggle. MSPmentor’s SaaS 20 Stock Index fell 3.41% for the week ended September 5 — marking the third consecutive week that the index has declined.
But there’s a bigger cause for concern as we head into the business week. The US federal government today (Sept. 7) took control of Fannie Mae and Freddie Mac, the two big mortgage lenders.
Here’s why we should all be a little worried.
First, the minor stuff. The SaaS 20 Stock Index’s biggest losers for the week ended Sept. 5 included:
- RightNow, the hosted CRM specialist (RNOW, -11.87%)
- EMC Corp. (EMC, -8.12%)
- Kenexa Corp., which specializes in on-demand HR services (KNXA,-6.50%)
- And Taleo Corp, another online HR specialist (TLEO, -6.15%)
Only four of our SaaS 20 Stock Index members saw their shares rise for the week ended Sept. 5, led by Salesforce.com (CRM, +7.91%).
Things could get worse for our SaaS 20 Stock Index — and the broader US markets — before they get better. At this point, all eyes are on the federal government’s newfound control of Fannie Mae and Freddie Mac. According to the San Francisco Chronicle:
The government agreed to pump billions of dollars into Fannie Mae and Freddie Mac and assume responsibility for trillions of dollars of their debt, while handing control of the companies to federal regulators. The takeovers mark the most dramatic government effort thus far to stem the financial chaos precipitated by the housing bust. At the same time, seizure of the two could ultimately cost taxpayers tens of billions of dollars, experts estimate, widening an already bloated federal deficit.
Those aren’t comforting words. Imagine if your business was struggling, and your best chance for success was a takeover by the government. Anybody else feeling a little nervous?