What happened

At approximately 10 p.m. Eastern last night, Russian military forces launched an all-out assault on their neighbor Ukraine. Russian stocks are plummeting as investors realize that a war, which we all hoped might remain limited in scope, has begun in earnest.

As of 10 a.m. ET, shares of:

  • Multinational mobile provider Veon (VEON -0.89%) are crashing 27.6%.
  • Russian online retailer Ozon Holdings (OZON) are down 42.2%.
  • And Russian tech giant Yandex (YNDX) is suffering the biggest meltdown of all -- a 55% plunge.
Column of tanks flying Russian flags rolling across a field of yellow and blue -- the Ukrainian national colors.

Image source: Getty Images.

So what

What do these three stocks have in common?

Obviously, all three are among the most high-profile Russian stocks that trade on U.S. stock markets today. (A fourth is mobile phones provider Mobile TeleSystems (MBT), MTS, whose shares are down 7%).

Curiously, though, each of Veon, Ozon, and Yandex is also a company that does business primarily in Russia but has chosen to locate its corporate headquarters outside of Russia. Ozon operates out of Cyprus, while Veon and Yandex have their headquarters in the Netherlands.

And why is that significant? Why are these three Russian stocks down so much more today than even MTS, for example?

Well, consider: Last night, in a tweet to Ukraine's supporters around the world, Ukrainian foreign minister Dmytro Kuleba requested that the international community impose "ruinous sanctions against the Russian Federation immediately," and in particular "disconnection of Russia from SWIFT." Here's the original tweet for the Cyrillic readers among us:  

Now what

SWIFT is the "Society for Worldwide Interbank Financial Telecommunication," the information superhighway connecting financial institutions all around the world. It's the system by which banks and other financial institutions send and receive money across national borders. It's the system through which Russian companies get paid when they sell something internationally, and pay for their own imports into Russia.  

If the central banks of the countries that operate SWIFT -- Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Great Britain, the United States, Switzerland, and Sweden -- agree to cut off Russia from SWIFT, therefore, it's going to make it very hard for any Russian company to do business internationally. And of the four companies named above, according to data from S&P Global Market Intelligence, Yandex gets 93% of its revenues from Russian business, MTS 97%, and Ozon 100%. Veon does 48% of its business in Russia, and 12% more in Ukraine.

Of the four, the companies that are internally split between their operations in Russia and their headquarters abroad -- Veon, Ozon, and Yandex -- look most at risk to me. But really, any company with close ties to Russia faces real risks now.

No matter how cheap Russian stocks might look, I wouldn't touch them with the proverbial 10-foot pole.