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I have yet to hear a substantial, quantitative argument that there is a tech bubble looming on the horizon. I have read a lot of anecdotal slop about VC capital

I have yet to hear a substantial, quantitative argument that there is a tech bubble looming on the horizon. I have read a lot of anecdotal slop about VC capital drying up or a few big companies going sideways, but as the number of tech startups grows, the long tail of "shocking, improbable" failures from big-valuation companies that make the news will grow with it. I do think the "shiny tech-hub" ecosystem is a little unsustainable, but it's not without historical precedent in finance and banking, and has little to do with the health of the tech economy. No one's gut has magical predictive powers about the market, but humans are almost universally prone to the mistake of thinking theirs does, especially if they can find other people who share that impression. The illusion of understanding is made much stronger by proximity.

roymurdock 10y ago
http://www.pwc.com/gx/en/technology/publications/assets/q3-2016-global-tech-ipo.pdf http://www.pwc.com/gx/en/technology/publications/assets/q3-2... Look at Unicorn IPOs, starting on p. 7: "Unicorns made a comeback this quarter with Nets A/S of Denmark and LINE Corp of Japan. Apart from these two, Unicorns have stayed away this year, indicating market uncertainties...The number of IPOs increased primarily due to the significant growth of low-value listings. The absence of large IPOs from major markets indicates that the technology IPO market, while ‘open’, is not very strong. Leaving out Q3’s two billion-dollar-plus IPOs, the average proceeds for the other 18 was just US$105 million. Also, NASDAQ remained the preferred exchange for smaller, cost-conscious technology companies. In the last few quarters, the top technology IPOs have been launched in Europe and Asia instead of the US, which has historically been a favored option for big-ticket IPOs. In the last five quarters, two of the top three came from Europe. The distribution of the top three IPOs for each of the last five quarters (15 total) has been Europe with six, followed by Asia with four. The larger tech IPOs from Europe tend to be from well established service companies with a long history of stable earnings. As a result, their IPOs are not negatively impacted by a difficult market." So if you strip out established services tech companies, traditional liquidity events for unicorns are drying up somewhat. Doesn't sound like a bubble, unless all the hugely-valued private unicorns run out of cash around the same time and flood the public markets, looking to raise equity funding. Of course, this doesn't factor in other types of liquidity events such as acquisitions, which have also fallen off recently [1]. Seems more like a controlled deflation/devaluation than a bubble to me, but who knows. It's fun to watch if you're not too closely affiliated. [1] https://webforms.ey.com/gl/en/industries/technology/ey-global-technology-mergers-and-acquisitions https://webforms.ey.com/gl/en/industries/technology/ey-globa...
x0x0 10y ago
How about the rash of companies going public and, within 6 months, trading for well under the price of their last round? And yes, I understand pseudo-ipo round investors get protections such as a ratchet that make it reasonable for them to pay more than it would be worth in the open market, but this nonetheless is pretty bubbly.

roymurdock 10y ago

http://www.pwc.com/gx/en/technology/publications/assets/q3-2016-global-tech-ipo.pdf http://www.pwc.com/gx/en/technology/publications/assets/q3-2... Look at Unicorn IPOs, starting on p. 7: "Unicorns made a comeback this quarter with Nets A/S of Denmark and LINE Corp of Japan. Apart from these two, Unicorns have stayed away this year, indicating market uncertainties...The number of IPOs increased primarily due to the significant growth of low-value listings. The absence of large IPOs from major markets indicates that the technology IPO market, while ‘open’, is not very strong. Leaving out Q3’s two billion-dollar-plus IPOs, the average proceeds for the other 18 was just US$105 million. Also, NASDAQ remained the preferred exchange for smaller, cost-conscious technology companies. In the last few quarters, the top technology IPOs have been launched in Europe and Asia instead of the US, which has historically been a favored option for big-ticket IPOs. In the last five quarters, two of the top three came from Europe. The distribution of the top three IPOs for each of the last five quarters (15 total) has been Europe with six, followed by Asia with four. The larger tech IPOs from Europe tend to be from well established service companies with a long history of stable earnings. As a result, their IPOs are not negatively impacted by a difficult market." So if you strip out established services tech companies, traditional liquidity events for unicorns are drying up somewhat. Doesn't sound like a bubble, unless all the hugely-valued private unicorns run out of cash around the same time and flood the public markets, looking to raise equity funding. Of course, this doesn't factor in other types of liquidity events such as acquisitions, which have also fallen off recently [1]. Seems more like a controlled deflation/devaluation than a bubble to me, but who knows. It's fun to watch if you're not too closely affiliated. [1] https://webforms.ey.com/gl/en/industries/technology/ey-global-technology-mergers-and-acquisitions https://webforms.ey.com/gl/en/industries/technology/ey-globa...

x0x0 10y ago

How about the rash of companies going public and, within 6 months, trading for well under the price of their last round? And yes, I understand pseudo-ipo round investors get protections such as a ratchet that make it reasonable for them to pay more than it would be worth in the open market, but this nonetheless is pretty bubbly.