Interesting article about 2019 IPOs

Interesting read about the years IPOs

3 Likes

Dot Com Bubble:

  • Companies promising profitability in future
  • Non-tech companies positioning themselves as “tech” or “tech enabled” to achieve premium valuation
  • Investors misled about prospects of these companies, leading to over-exuberant “animal spirits”

2019:

  • Companies promising profitability in future
  • Non-tech companies positioning themselves as “tech” or “tech enabled” to achieve premium valuation

The last component seems to be missing (The We Company IPO being a case in point). Stay smart out there kids! :pray:t3:

2 Likes

I’m going to add some contention to the mix :wink:

While these companies have low profits, innovation is crucial to the progress of society.

We’ve seen this through the ages and we continue to see this today not solely in tech companies such as Uber, WeWork, Amazon and Facebook, that are changing the way we travel, work, shop and connect but in governments that drive change through fighting modern day wars like pollution with technology.

It’s like Fed Wilson, a Venture Capitalist that funded internet startups during the bubble said:

“Nothing important has ever been built without irrational exuberance. Meaning that you need some of this mania to cause investors to open up their pocketbooks and finance the building of the railroads or the automobile or aerospace industry… All that stuff has allowed what we have today, which has changed all our lives… that’s what all this speculative mania built”.

Profit or no profit, these companies have already made a huge difference to society.

Five years ago, Amazon was trading at $331 a share with a $153 billion market cap. Today, Amazon trades around ~$1,835 a share with a ~$900 billion market value.

As an investor - their profitability makes little difference to me in this scenario.

Sometimes ‘value’ is not found on a balance sheet. :money_with_wings:

2 Likes