Please ensure Javascript is enabled for purposes of website accessibility

Why Yandex Stock Just Crashed 18%

By Rich Smith - Oct 11, 2019 at 11:47AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

President Putin targets foreign ownership of Russian shares.

What happened

Yandex (YNDX -6.79%) stock -- the "Russian Google" -- is plummeting in Friday-morning trading, already down 17.9% as of 11:30 a.m. EDT.

You can thank President Putin for that.

This morning, The Moscow Times reported that Kremlin officials are backing a draft law now working its way through the Duma (Russia's lower house of representatives) that would limit foreign ownership of Russian technology companies to 20%.

Moscow's Kremlin after a snowfall.

Image source: Getty Images.

So what

The draft law in question was introduced in June, reports MT, so perhaps it shouldn't come as a huge surprise -- although it apparently is jolting some folks today. Moreover, the draft law was introduced by United Russia Duma member Anton Gorelkin. And United Russia backs Putin in power, a second reason to expect this law to have Kremlin support.

But it's even worse than that. According to one Russian news website, persons close to Putin are actively lobbying in support of the law, which had previously been opposed by the Russian Ministry of Communications, which can now be expected to be issued new marching orders.

Now what

Adding a further wrinkle to the story, MT is citing a local analyst who believes that Yandex's Yandex.Money website may have suffered a data breach. Consumer protection laws being what they are in Russia, I doubt the potential for legal liability per se is sufficient to explain today's sell-off. But I wouldn't put it past the authorities to use such a scandal -- be it true or otherwise -- as a further justification for bringing Yandex under tighter government control.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Yandex N.V. Stock Quote
Yandex N.V.
YNDX
$18.94 (-6.79%) $-1.38

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
356%
 
S&P 500 Returns
124%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.