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The market is going to crash and everyone wants to cash out before it does.

by CSMastermind 7y ago

polote 7y ago
But could also be the thing that will make the market crash nobody knows
- prklmn 7y ago
  The S&P 500 by itself is valued at almost $24T (https://ycharts.com/indicators/sandp_500_market_cap https://ycharts.com/indicators/sandp_500_market_cap). A couple large companies going public and raising several billion dollars will not make the market crash. All of them listing at once is a symptom of where we are in the economic cycle, and where these companies are in their individual growth curves.
- screye 7y ago
  I can see that happening. Loss making unicorns go public -> investor pressure builds to reach profitability -> none of them can deliver on promises in the short term -> public does not want to own these stocks anymore -> causes a frantic selling spree -> market crashes.
  - megous 7y ago
    Why would the market crash, and not just these few bad comapanies? What's systemic about the overhyped IRC clone or just another taxi service getting their fair value judged by public markets, that would cause a market crash?
    - komali2 7y ago
      Maybe it finally pushes the student loan crisis over the edge when an influx of unemployed tech workers are added to the tens of thousands defaulting on their loans?
      - mfatica 7y ago
        Outside of silicon valley there's an extraordinary amount of unfilled tech positions. If they are unemployed it's likely their own fault.
        komali2 7y ago
        > If they are unemployed it's likely their own fault. Well hold on, I was just idly speculating, but I don't like this kind of thinking. There's a hundred and one reasons people can't leave a city, or the obstacle to leaving is too great. Off the top of my head, not wanting to uproot kids into a new school system, partner's job, disability that makes it extraordinarily difficult to move (away from whatever ADA stuff you've got set up at your apartment and commute flow you've got set up), need to stay near sick family, need to stay regional to a very specific doctor or healthcare facility, and that's just needs. A strong desire to stay in a local area due to history or just preference should be valid as well. I see this reasoning used to attack non-tech workers all the time and it bothers me.
    - est31 7y ago
      I doubt there will be a global stock market crash but a there can definitely be a burst of the second dot com bubble. It would be enough for one of the overvalued companies to go bankrupt to take them all down, e.g. Tesla (they certainly have liquidity problems).
    - lordnacho 7y ago
      The portfolio effect: A lot of funds pile into the techs. They lose money. Their customers pull their money. They have to sell not just the techs, but the rest of their portfolios too.
  - ummonk 7y ago
    Well, Zoom is already profitable and Slack could easily go profitable. But yes, the tale is different for AirBnB, Lyft, and Uber.
    - skinnymuch 7y ago
      Airbnb is profitable. It has been since second half of 2016. Or at least close enough to profitable depending on the metrics you want to account for. https://www.marketwatch.com/story/airbnb-made-its-first-profit-in-2016-report-2017-01-26 https://www.marketwatch.com/story/airbnb-made-its-first-prof... https://www.bloomberg.com/news/articles/2019-01-15/airbnb-says-it-made-a-profit-again-in-2018-as-ipo-looms-large https://www.bloomberg.com/news/articles/2019-01-15/airbnb-sa...
      - ummonk 7y ago
        Ah thanks! I always did get the impression it was a more viable business than Lyft or Uber, but wasn't aware it was becoming profitable.
        skinnymuch 7y ago
        Haha yep. Cheers!
BurningFrog 7y ago
What specifically will make the market crash?
- freehunter 7y ago
  If nothing else, the cycle of the market. Might not be this year, might not be next year, might not be the year after, but it's inevitable and we're coming due. Could happen at any time for any reason, but it will happen. If you're thinking of going public, you want to get in before that happens.
- shostack 7y ago
  The GOP's tax heist that has led to dumping rocket fuel on an already insanely hot market, leading to stock buybacks that give the illusion of growth and mask warning signs, coupled with removing the safety net of having the ability to reduce taxes when things do start declining. We're in for a rough one, and it is VERY intentional this time.

The market is going to crash and everyone wants to cash out before it does.

polote 7y ago

But could also be the thing that will make the market crash nobody knows

prklmn 7y ago
The S&P 500 by itself is valued at almost $24T (https://ycharts.com/indicators/sandp_500_market_cap https://ycharts.com/indicators/sandp_500_market_cap). A couple large companies going public and raising several billion dollars will not make the market crash. All of them listing at once is a symptom of where we are in the economic cycle, and where these companies are in their individual growth curves.
screye 7y ago
I can see that happening. Loss making unicorns go public -> investor pressure builds to reach profitability -> none of them can deliver on promises in the short term -> public does not want to own these stocks anymore -> causes a frantic selling spree -> market crashes.
- megous 7y ago
  Why would the market crash, and not just these few bad comapanies? What's systemic about the overhyped IRC clone or just another taxi service getting their fair value judged by public markets, that would cause a market crash?
  - komali2 7y ago
    Maybe it finally pushes the student loan crisis over the edge when an influx of unemployed tech workers are added to the tens of thousands defaulting on their loans?
    - mfatica 7y ago
      Outside of silicon valley there's an extraordinary amount of unfilled tech positions. If they are unemployed it's likely their own fault.
      - komali2 7y ago
        > If they are unemployed it's likely their own fault. Well hold on, I was just idly speculating, but I don't like this kind of thinking. There's a hundred and one reasons people can't leave a city, or the obstacle to leaving is too great. Off the top of my head, not wanting to uproot kids into a new school system, partner's job, disability that makes it extraordinarily difficult to move (away from whatever ADA stuff you've got set up at your apartment and commute flow you've got set up), need to stay near sick family, need to stay regional to a very specific doctor or healthcare facility, and that's just needs. A strong desire to stay in a local area due to history or just preference should be valid as well. I see this reasoning used to attack non-tech workers all the time and it bothers me.
  - est31 7y ago
    I doubt there will be a global stock market crash but a there can definitely be a burst of the second dot com bubble. It would be enough for one of the overvalued companies to go bankrupt to take them all down, e.g. Tesla (they certainly have liquidity problems).
  - lordnacho 7y ago
    The portfolio effect: A lot of funds pile into the techs. They lose money. Their customers pull their money. They have to sell not just the techs, but the rest of their portfolios too.
- ummonk 7y ago
  Well, Zoom is already profitable and Slack could easily go profitable. But yes, the tale is different for AirBnB, Lyft, and Uber.
  - skinnymuch 7y ago
    Airbnb is profitable. It has been since second half of 2016. Or at least close enough to profitable depending on the metrics you want to account for. https://www.marketwatch.com/story/airbnb-made-its-first-profit-in-2016-report-2017-01-26 https://www.marketwatch.com/story/airbnb-made-its-first-prof... https://www.bloomberg.com/news/articles/2019-01-15/airbnb-says-it-made-a-profit-again-in-2018-as-ipo-looms-large https://www.bloomberg.com/news/articles/2019-01-15/airbnb-sa...
    - ummonk 7y ago
      Ah thanks! I always did get the impression it was a more viable business than Lyft or Uber, but wasn't aware it was becoming profitable.
      - skinnymuch 7y ago
        Haha yep. Cheers!

BurningFrog 7y ago

What specifically will make the market crash?

freehunter 7y ago
If nothing else, the cycle of the market. Might not be this year, might not be next year, might not be the year after, but it's inevitable and we're coming due. Could happen at any time for any reason, but it will happen. If you're thinking of going public, you want to get in before that happens.
shostack 7y ago
The GOP's tax heist that has led to dumping rocket fuel on an already insanely hot market, leading to stock buybacks that give the illusion of growth and mask warning signs, coupled with removing the safety net of having the ability to reduce taxes when things do start declining. We're in for a rough one, and it is VERY intentional this time.