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Breakingviews: Tech Mania 2.014

Tuesday, May 06, 2014 - 03:40

May 6 - Breakingviews columnists discuss their new e-book on the internet bubble and how the current boom compares with the one that crashed some 14 years ago.

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Tech mania two point 014. That's the title of the new e-book from us at breaking years. It's about the new tech bubble we call them mini me bubble because it's not nearly as big as the last 114 years ago. Significant nonetheless the book covers hubris. Public offering its governance problems and it's got a little bit about global flavor -- certainly take -- in the big things in the -- Its fiscal would have. And then in the last tech bubble only more a bit more farcical and in less important than they were -- -- Yeah I mean we're seeing all these companies with no revenue being bought out for multi billion dollar valuations. We're seeing companies going public where the owner retains a huge mistake it could stake in the company. And second basically annual investment company has no rights whatsoever for the company terrible governor. Yet terrible governance and we're seeing I'm also -- the rise of companies and and and in China differences -- Bob IPOs coming in which can be -- -- 200 laps on it was a very US centric Yeltsin makes obvious this -- -- from Northern Europe. UK has been involved as well in -- of my favorite sort of staples of this time this time around is is some of the language we've talked about some of the crease centric. But also what is it you and -- records are just fantastic and it's this mythical -- that has taken over so about this idea that. If you get a achieve a certain valuation yours you know court. And they're proliferating around the world technology. I basically I think really. More substantively on the this talent and a lot of people were worried that there isn't a bubble -- -- you make the point I think is in the book as well that. The last time it was really concentrated and it was really and companies have a lot of investment it was it was two things in new direction to bubbles there is a tech bubble there is a Telecom bubble. And the Telecom bubbles particularly wary because it is as much bigger if you look at Telecom companies. Loaded CDS he indicates his mind and there is you know sit -- Cisco was worth the reformists or 500 billion dollars at its peak Microsoft was as well. I'm you take for Telecom companies. And they were worth over trillion dollars in lost 90% of valuation next and within like six months of the top and that's not in this and that's that's I don't know along -- some very very content very concentrated. Get up important -- companies don't have debts and even if they do fail it doesn't really have a broader impact in the economy. Well that's an interesting question what happens if and win. When I guess this problem of this bubble pop so it doesn't feel like -- as concentrated portfolios well and there is there's a lot of hype around that -- even become cool factor this summer out of I don't know how much in this there was round. Cisco and JD yes but obviously the likes of you on mosque. The sharing economy -- -- every ball game but certain tax check. But you know they're not you know some of these professional private and private valuations are getting -- -- but they're just they're not as sort of now you -- concentrated portfolio like a security companies worth 500 billion multiple 500 billion dollar companies which is arising out of north and definitely not happening. So the thing is it is changing I mean it's it's significant is allowed to come -- these companies do affect how everyone lives and how it interacts -- BBM going to Iceland and I have written every NB. You know these things are gonna stay in these these changes are gonna stay in the economy statement and in business. The companies may not yet that's that's our -- interesting stuff let's hope we learn from this one. Read the book in the meantime stay tuned for more breaking views tomorrow.

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Breakingviews: Tech Mania 2.014

Tuesday, May 06, 2014 - 03:40