Posted on 08/12/2015 10:31:01 AM PDT by BlackAdderess
(snip) If we thought it was stupid to invest in public internet websites that had no chance of succeeding back then, it’s worse today.
In a bubble there is always someone with a “great” idea pitching an investor the dream of a billion dollar payout with a comparison to an existing success story. In the tech bubble it was Broadcast.com, AOL, Netscape, etc. Today its, Uber, Twitter, Facebook, etc.
To the investor, its the hope of a huge payout. But there is one critical difference. Back then the companies the general public was investing in were public companies. They may have been horrible companies, but being public meant that investors had liquidity to sell their stocks.
The bubble today comes from private investors who are investing in apps and small tech companies.
(snip)
So why is this bubble far worse than the tech bubble of 2000 ?
Because the only thing worse than a market with collapsing valuations is a market with no valuations and no liquidity.
If stock in a company is worth what somebody will pay for it, what is the stock of a company worth when there is no place to sell it ?
(Excerpt) Read more at blogmaverick.com ...
I was of the observation that back then, the tech bubble was powered by a bunch of “get-rich-quick” scammers, realizing that there was fast money to be made by setting up web services and then cashing out before the trend broke, and moving on to the next scam.
The current one seems to be built on goofy apps, games, or social media services. There was one app company about to go under just a couple of weeks ago until it was infused with more VC (sucker) cash.
The product? An app that takes a selfie of you and a photo of what’s in front of you. You then upload it to their social site.....and people look at them.
They make nothing in terms of money, and only exist to maybe hit it big or to become a buyout target for Google, Apple, or Microsoft.
This Mark Cuban guy is in the news twice today. I wonder what he’s up to. He probably wants to hitch his wagon to Don Trump.
It sounds to me like he’s saying that successful crowd-funded companies have no way to go public, due to (unnamed) rulings by the Securities & Exchange Commission. Therefore your share of such a company is not marketable.
Or something.
Today its, Uber, Twitter, Facebook,I can't believe that's the best shit a once great nation has to offer.
Let me know when you figure out Twitter’s business model. I’m still stumped.
Now they're at a multiple of about 20X earnings. That's just a smidgeon about where the S&P 500 is selling.
I actually think tech stocks are cheap.
I meant 2000 not 2001.
Liberals, in particular wealthy liberals, stick to a childish notion that wealthy people have to be republican.
This confusion is on display with Cuban.
I think you are right. A key question that sometimes gets overlooked when talking about stock valuations is ... "compared to what?". Unless it is left in cash ... money has to go somewhere.
In 2013 he said crowdfunding should be required of every new startup, now he’s saying it’s a bubble about to pop.
If he is complaining that the SEC is containing the resulting damage it sounds to me like a guy who is trying to pass his losses off to some other poor schmuck!
“Let me know when you figure out Twitter’s business model. I’m still stumped.”
I assume its similar to Google’s...ever ponder how on earth Google Earth or Google Maps makes money?
Its all data mining, sold to companies that bring you banner ads. You tweet about your dog, you get dog food pop up ads and e-mails...and likely some of the commercials on tv are now tailored to the household’s ‘profile’.
Oh, and no doubt political campaigns also buy the info...and a campaign can probably build an accurate personality profile for a prolific twitter user. Remember in 2012 the media were going gaga over how the Obama campaign was able to find new voters...they didn’t do that with only registration roles...rather they used social media to build profiles of left leaning people who seldom voted, and sent a campaign worker to knock on their door.
Ever wonder why Obamacare includes digitizing of health records? I have no doubt those health records, as well as Barrycare enrollment records will find their way into the grubby hands of rat campaign workers.
Not to sound too conspiratorial, but 1984 is here. Just about all information is saved, categorized, and sold....and that’s why tweets make $.
Yeah, that’s basically how it works.
Private investors really have no clue as to what apps will be successful, so they tend to invest in a whole bunch that seem like that they might have even a remote possibility of succeeding. For every ten or twenty apps they fund, maybe one will be a success, and either turn a profit, or get bought up by a tech giant. The profits the investors make from that one (hopefully) fund their losses in the others.
Of course designers and programmers are happy to churn out crappy apps for them to invest in, because that’s easier than working in a cubicle for a big tech company.
“in the news twice today. I wonder what he’s up to”
he stopped trash talking Trump after someone asked him if he would consider VP
“For every ten or twenty apps they fund, maybe one will be a success”
That’s about correct. Only 5% of “innovation” is successful.
I am glad the private investors aren’t hoarding their money.
This guy is ahead of the curve though, in that he’s investing in startups in parts of the country with much lower overhead and favorable conditions for attracting talent. Kudos to him, but I still don’t want him in a leadership role in the GOP as he’s done a major flip flop on economic matters in his core business. Which is to say his best thing.
“I actually think tech stocks are cheap. “
Totally agree. I don’t think tech is in a bubble. Maybe some individual companies, but not tech as an industry.
Cuban happened to stumble into a speeding money train and he got hit. He’s no smarter than the average FReeper.
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