The Bubble That Wouldn’t Blow
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Courtesy of Joshua M Brown
It’s possible the burgeoning tech bubble that was well underway in 2014 has gradually deflated itself down to a less threatening level without millions of aftermarket investors getting themselves bludgeoned in the process. A lot of the excesses may be in the process of wringing themselves out at the venture level, before mom & pop even have a chance to run head first into the brick wall of reality.
That’s cool, I guess.
Wall Street Journal:
Only 11% of U.S. IPOs so far in 2015 involved tech companies, according to new data from research firm Renaissance Capital. That is the lowest level since 2008, when the figure was 10% and the financial crisis was in full force. Meanwhile, shares in many of the companies that have gone public aren’t performing well.
The data send a strong signal that the broader markets aren’t eager to buy everything venture capitalists are selling, threatening the outlook for what has been one of the most robust segments of the U.S. investment landscape.
We may not end up with a full-fledged bubble this time around after all. Some fires snuff themselves out once they’ve eaten up all the remaining oxygen in the room, before they’ve had a chance to spread much farther and do real damage.
A down-cycle that only ratchets things down a bit in a small circle of founders and VCs is vastly preferable to a full-scale economy-crushing collapse, a la 2000-2002. We’ll take it.
Source:
IPO Market Continues Without Many Tech Companies (Wall Street Journal)
