A New Tech Stock Bubble?
1998/99 tech stock values are rising at unbelievable rates even though very few were profitable. There was even talk of not needing profits any longer. It was a new world. Then in 2000 the bubble burst.
Snap, the parent of Snapchat, introduced their public offering today to complete adulation. In spite of the fact that investors in Snap will have no voting rights. You heard me right, investors will get no say in the running of the company. The founders have complete control of the company.
Snap has also never been profitable and the CEO has indicated that he is not sure if they will be. The public offering has made him a multi billionaire anyway and investors are falling over themselves to own shares.
When company fundamentals start becoming unreasonable and more importantly people accepting it…watch out.
We still are believers in the growth & opportunities the US economy will offer over the next few years, but we recommend being very selective in how you allocate your investments. Ride the wave, but be wary of dangers below the surface.