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The problem is Silicon Valley venture capitalism might be in a bubble right now, but the broader stock market is not (yet). I'd be surprised if the open market
by dstein 16y ago
The problem is Silicon Valley venture capitalism might be in a bubble right now, but the broader stock market is not (yet). I'd be surprised if the open market doesn't see straight through these valuations.
- knowsnothing613 16y agoit depends on how liquid the shares are. If 80% are controlled by insiders,and institutions loyal to insider, they can run up the stock, despite the incongruity with fundamentals. case study: Open Table http://www.google.ca/finance?q=open+table http://www.google.ca/finance?q=open+table It has a P/E of 157!!!!! And it's still going strong. Likely because it's getting pumped by thin trading. It's the classic pump n dump. Run up the stock, and try to unload it to dumb money like mutual funds, and pension funds aka (your money). Groupon's P/E can run just as high. It depends on how high they have to push it to entice dumb money, which is likely why they are pushing out a pre-IPO PR blitz to frame the story beforehand. This was all done in Web 1.0. Same bag of tricks. Let's see if the average American has learned anything.
- zackattack 16y agoYou seem confident. Are you taking a short position on Open Table? I doubt it. Put your money where your mouth is.
- jarek 16y agoMarkets can remain irrational a lot longer than you and I can remain solvent.
- knowsnothing613 16y agoI'm not stupid. If the shares are illiquid, I'll wait for the dumb money, and short like the big players, if/when P/E gets above 200.