With King Digital going public and Facebook’s $2 Billion acquisition, The Daily Ticker asks “Are we on the verge of another tech bubble?”
Idiots.
On “the verge” implies that today’s valuation are normal and we are about to experience a huge run up, leading to an eventual “bubble”. We are in a massive bubble already. Today. Thanks to the FED and their monetary policy or lack thereof. The valuations are at astronomical levels and today’s active IPO market is a clear indication of that. Further, with our mathematical and timing work clearly predicting a severe bear market and a US recession between 2014-2017, the bubble is about to POP.
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Attention: Tech Stocks About To Surge? Google
Daily Ticker Are we on the verge of another tech bubble?
Shares of King Digital Entertainment (KING), the mobile game maker of the popular Candy Crush, started trading today for the very first time but below an IPO price of $22.50 a share which valued the company at $7.1 billion. In early trading shares were down about 8% at $20.70.
Facebook (FB) announced it’s buying virtual reality firm Oculus VR for $2 billion--$400 million in cash plus stock–just five weeks after it announced a $19 billion acquisition of WhatsApp. Oculus makes virtual reality goggles used to play video games, but Facebook CEO Mark Zuckerberg said Tuesday he plans to expand its platform to include education, medicine and more.
Finally, Box Inc., a cloud storage company, announced Monday plans to raise $250 million through an IPO.Unlike King Digital, which had profits of more than half a billion dollars last year, Box has been operating at a growing deficit despite increasing revenues.
Could we be on the verge of another tech bubble?
“Don’t insult the real bubble of the 1990s,” says Henry Blodget, though he admits “some valuations are breathtaking,” like King’s. Its “numbers are already shrinking,” says Blodget. “I don’t know anyone who plays Candy Crush anymore.”
There are no current numbers for Oculus. Its virtual reality headset is available only as a prototype for developers and not for sale to consumers. “This is as speculative as you can get,” says Blodget. This acquisition is unlike Facebook’s other recent buys: $1 billion for Instagram, a company with 100 million users and $19 billion for WhatsApp with 450 million users (growing at a rate of 1 million users a day).
Most people have never used the Oculus virtual reality headset but those “who have tried it say it’s mind-blowing,” says Blodget. Still, he warns, “there’s a very good chance that this thing is worth zero in two years.”