4 ms·
It's not just IPOs, the whole market is experiencing a correction. We're way overdue for one anyway.
by dntrkv 4y ago
It's not just IPOs, the whole market is experiencing a correction. We're way overdue for one anyway.
- somethoughts 4y agoIts relative - high PE, high growth multiple stocks (such as YC IPOs) have generally been reverting to mean. Most stocks that were already at the mean w.r.t. PE are still sticking to the mean with flat earnings. What needed correcting is getting corrected. What was correct is staying correct. The rise in interest rates means that companies that have been producing their own cash can fund growth initiatives internally. Companies who were funding growth initiatives using outside capital (debt, VC investment) are now going to be paying 10%+ to do so.