Tech Bubbles, FOMO & Revenge Effects
What are we missing in all the chatter about fear of missing out (FOMO), scarcity, and the current technology bubble among late-stage private companies? I’ll posit a few things, some obvious, some less so, and a couple deranged and hypothetical:
- Lots of people took this 2001 bumper sticker very seriously: Knowing that most of the money is made by being early to prominent tech IPOs, they did the rational thing: They bought earlier. In this case, not just early, but pre-IPO – in late-stage, private markets. One reason we are seeing this incredible rush to buy overpriced companies in private markets is fear of missing out on the appreciation when the companies come public. As a result, the post-IPO price appreciation is happening pre-IPO, making private companies back-door public – except, as Bill Gurley has written, in the ways that matter most, like liquidity, quality of financials,...
Continue reading →