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What's happening?
In an extension of yesterday's significant drop, shares of Russian Internet search engine Yandex NV (YNDX) plunged as much as 15% early Tuesday as the Russian ruble fell to fresh lows against the U.S. dollar. The move specifically came amid continued oil price declines and political strife in the region.
Why it's happening
After another 10%+ plunge in the ruble today of this writing, the value of the dollar sits at a record-high at roughly 73 rubles, versus around 58 rubles per dollar on Friday. Worse yet, according to Barron's, the currency failed to find a floor despite a surprise late-night move by Russia's Central Bank to shore it up by increasing interest rates by 650 basis points to 17% -- its largest such increase since 1998.
Any future economic weakness from the struggling ruble could be bad news for companies which generate the majority of revenue in currency as Yandex does. Yandex, for its part, overwhelmingly relies on its core text-based advertising business -- which accounted for 93% of total revenue last quarter -- to achieve its largely solid financial results. Once again, as long as the unrest in Russia persists, Yandex shares will likely continue to experience downward pressure.
