Posted on 03/18/2017 5:10:35 AM PDT by SkyPilot
Startups are beginning to run out of money and investors are becoming more discerning. How does this compare to the time leading up to the dotcom crash?
If you were looking for an apartment in the Bay Area 18 months ago, realtors recommended you took your checkbook to viewings and were prepared to fork out for the deposit and first month’s rent – that’s $8,000 to $10,000 for a two-bedroom place in San Francisco – on the spot.
“There was no negotiation because there were 10 people behind you saying, ‘We’ll take it’,” said Ron Stern, CEO of housing relocation service Bay Rentals.
Today, rents are still expensive, but the market has plateaued after years of painful increases. It’s part of a broader trend in the Bay Area: Silicon Valley’s technology bubble has had some of its wind knocked out – not bursting, but fizzling – with VCs making fewer investments, startup valuations falling, and recruitment slowing.
Scraping by on six figures? Tech workers feel poor in Silicon Valley's wealth bubble
“We’re starting to get a lot of résumés from [software engineers at] companies where the business model isn’t working and they can’t get funding, so they are closing down or cutting back,” said Mark Dinan, a software recruiter based in the Bay Area, who keeps track of companies’ hirings and firings.
These startups are running out of money because VCs are being more discerning about where they place their money, making fewer, bigger bets.
“The number of investments [in the private market] has fallen by about a third, but the amount of capital is around the same,” said Tomasz Tunguz, a venture capitalist at Redpoint, adding that some of the “fast money” from hedge funds and mutual funds had shifted away from the sector.
(Excerpt) Read more at theguardian.com ...
Think outside the box: San Francisco's horrible, no good, very bad housing
Read more
“We’re seeing overvalued companies, funded based on hopes and dreams and aspirations and not good business models. Companies counting users and eyeballs rather than profits. There are a lot of similarities."......“The [dotcom crash] happened very suddenly and without any warning,” Damodaran said. “When it does happen everyone says they saw it coming. If you saw it coming then why didn’t you get out of it?”
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Call me crazy, but when a company like Uber, which is nothing more than a Ride-sharing app, is "valued" at $69,000,000,000 (that's 69 Billion Dollars), then something is rotten.
There have been many financial commentators who claim that the markets are more stable due to the tech startups. I just don't see it.
Hold onto your hats.
The market is driven by two things: greed (hope), and fear.
When fear takes hold, greed also takes over as people rush to the exits of the burning building.
Good post I agree 100%
But if you live by the casino, you can die by the casino.
The (public) tech market is more stable today than 1999-2000 because most of the public tech companies trade at 15-30x earnings (eg: AAPL & INTC at 17x) not 2000x+ or even non-existent earnings. Some of these private tech companies (or one that just went public - SNAP) are drastically overvalued, though - UBER is the poster child. Airbnb, though, is already EBITDA positive and likely is worth its ~30 billion valuation.
Somewhere between 3 and 10% pullback would be understandable...note I did not say crash. With president Trump there the confidence factor is there whereas Obama caused fear.
The number of picky buyers in the market and thin trading volumes and hedge fund managers making decisions may cause some quick pullbacks.
Now you know why Google and all the techs have partnered with Big Brother.
You can do only so much with it.
From Space Invaders and PacMan to now has been a very rapid and short 35 years or so.
The only thing left for Satan to synthesize is sex and he is desperately working on THAT.
Thirty five years is a little over one generation and as far as I'M concerned, the electron is complete in daily life and we need no more innovations or new looks.
Good. The bubble needs to burst. The billion dollar valuations are way way out of line and unreasonable. The expectations are far from reality.
That's true.
It is interesting that back in September Trump said emphatically that the stock market was currently a "Big, fat bubble."
He must also realize that the Central Banks, the globalists, and many others who helped pump up the behemouth in the Obama years are not his friends. They might even be setting up the markets fail in some cases just to stick it Trump. The left is already salivating over that prospect. There are many articles about it. Here is one:
http://www.politico.com/story/2017/02/trump-stock-market-bubble-235328
The problem I see today with many of these publicly traded companies is two-fold:
1. Old "blue-chip" companies are able to produce more products and services than we even need anymore.
2. New companies in state-of-the-art industries are trying to develop technology that has a diminishing return on investment. Amazon, for example, had a terrible 4th quarter in 2016 even as record numbers of online orders were placed during the Christmas shopping season.
Here's a question I've been asking myself for some time now: What exactly can a major U.S. company produce anymore that most people even want to buy for a premium price?
He is. Sex robots will be big business.
Yesterday, Drudge had headlines about the future tech implants into our brains. They will make a "hybrid" human that will be "stronger, smarter, faster."
Keep an eye out for the buzzword "singularity" when it comes to these.
Here's a question I've been asking myself for some time now: What exactly can a major U.S. company produce anymore that most people even want to buy for a premium price?
I think we will see a much greater emphasis on virtual reality, and hyper reality.
They are working on hyper reality. It is like a video game for living, and it is intense and quite scary.
I complained on another thread about my bank and the month long promotional about how I'm going to LOVE their new look, only to be locked out for a weekend and finally come back with the log in placement from the left margin to the upper right corner.
THIS was what the hype was all about ?
He's already started by planting sex bombs in the minds of children via public school curriculum and government conditioning.
EVERY ONE OF THE RIOTERS IN AMERICA
Is a drop out or graduate of public school.
NONE came from Catholic parochial schools, nor home schools, nor private schools .... all taxpayer paid for "public" schools.
You're right: Electrons have been exploited to their fullest... They're at the end of their life-cycle... Soon to be "old hat"...
So, let's shift paradigms and migrate to the next platform.
I don't know that that will be. Quantum dots? Femto-scale technology? We'll see.
Regards,
No one wants to sell anything, it's power and control they want and the ONLY defense against that is MORE powerful to re-gain control.
HERE'S the deal ... if you want your SELF back .... your self must be more powerful than the power that controls you.
But if you don't know there's a battle going on in a war ....... you'll never train and thus be neutralized by the more powerful
What the hell does that have to do with a thread about valuations in the U.S. stock market?
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