Why This Tech Bubble is Worse Than the Tech Bubble of 2000
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Why This Tech Bubble is Worse Than the Tech Bubble of 2000
1–10 of 105 posts
Re: Why This Tech Bubble is Worse Than the Tech Bubble of 2000
#2"All those widows and orphans"
Spare me. What are the numbers on those widows and orphans? Because the thing is, tech investment right now is driven by investors and funds—entities that by definition should be able to handle their losses. Entities that by definition are more educated about the downside risk than the tons of John Q Public idiots that were day trading Internet stocks back in 2000.
Maybe the numbers support what he's saying. If they do, I'd love to see them. shrug
Re: Why This Tech Bubble is Worse Than the Tech Bubble of 2000
#3Over the last three years Cuban has consistently, publicly said he doesn't see a bubble.
Now he's seeing one derived from crowd funding? I'm not sure whether to think he's on to something, or whether he dislikes the idea of having vastly more competition for the sort of angel deals he frequently does. These new crowd funding sites are pushing up his cost to get into early rounds on good companies. There's no chance he likes seeing his entry fee substantially pushed upwards (lowering his returns); he has frequently pointed out how much he dislikes Silicon Valley's expensive early valuations and has proclaimed he views that as an isolated bubble.
Re: Why This Tech Bubble is Worse Than the Tech Bubble of 2000
#4> Broadcast.com, AOL, Netscape, etc. Today its, Uber, Twitter, Facebook
Even mentioning his company in the same breath as Uber, Twitter and Facebook shows how out of touch he is IMO. Broadcast.com was hardly a business! Those companies have BILLIONS of dollars of real revenue.
Re: Why This Tech Bubble is Worse Than the Tech Bubble of 2000
#5So the argument here is that the SEC should lessen investment restrictions so that VC's can pawn off their junk stock to the unsuspecting John Q. Public as soon as they see (and hopefully for them right before) the bubble pops?
Re: Why This Tech Bubble is Worse Than the Tech Bubble of 2000
#6"In the tech bubble it was Broadcast.com, AOL, Netscape, etc. Today its, Uber, Twitter, Facebook, etc."
Did he just compare himself to Uber and Facebook? Wow...
Re: Why This Tech Bubble is Worse Than the Tech Bubble of 2000
#7> Broadcast.com, AOL, Netscape, etc. Today its, Uber, Twitter, Facebook Even mentioning his company in the same breath as Uber, Twitter and Facebook shows how out of touch he is IMO. Broadcast.com was hardly a business! Those companies have BILLIONS of dollars of real revenue.
I'd never heard of Broadcast.com before this post. Checking http://en.wikipedia.org/wiki/Broadcast.com, I see that "In April 1999, Yahoo! acquired the company for $5.7 billion (or over $10,000 per user) in stock and renamed it Yahoo! Broadcast Solutions. The company had 570,000 users. "
I"m comfortable calling that a Bubble.
Re: Why This Tech Bubble is Worse Than the Tech Bubble of 2000
#8Pretty sure they were called "Angels" back then too
Re: Why This Tech Bubble is Worse Than the Tech Bubble of 2000
#9This is why most angels have to be accredited investors, meaning that they need to have $1MM in assets. Millionaires investing in new ideas aren't exactly naive widows and orphans (though they could be). With public stocks there is indeed high liquidity, but there was also strikingly high volatility during the tech bubble. It's good to be able to sell your shares, but less so if the price can drop 80% in a day. That's when the common person gets hurt and the effects of a bubble are felt by the general public.
Accreditation rules can seem unfair, but this scenario is exactly what they're designed to prevent. Crowdfunding is a whole different issue. Most crowdfunding campaigns trade products for money, not equity for money. Kickstarter campaigns tend to go bust frequently, but people don't invest their life savings in a crowdfunded project hoping to strike it rich. People with disposable income investing hundreds or thousand of dollars in an idea isn't a sign of a bubble. It might turn out to have deleterious long term effects, but, we'll see.
Maybe I'm not understanding what Cuban is saying here, but it doesn't seem to make a lot of sense.
Re: Why This Tech Bubble is Worse Than the Tech Bubble of 2000
#10> Broadcast.com, AOL, Netscape, etc. Today its, Uber, Twitter, Facebook Even mentioning his company in the same breath as Uber, Twitter and Facebook shows how out of touch he is IMO. Broadcast.com was hardly a business! Those companies have BILLIONS of dollars of real revenue.
I noticed the boardcast plug but they did well at their IPO
"It was 9 years ago we went public with what was then the biggest first day jump in stock price in IPO history"
Relatively speaking for though AOL and Netscape at the time where not a bad analogy