I remember the tech boom in the late 90`s. It was so many great tech companies and we all knew that this was the future. Investors were buying tech stocks with both hands, and we all know the results; A BIG FAT Bubble.
We can see some similar things going on today. Twitter was a hype when they went public in 2013 at a share price of $26. Investors liked the stock and it soared to about $75, but it all stopped there. Wednesday this week, Twitter traded at an all time low at $15.
Twitter is not alone in this bubble club right now. Many other tech stocks has suffered lately and I think there is different reasons for that. The main reason for the smaller tech companies is easy money because of the rock-bottom interest rates.
Together with inflated tech stock prices we can also see sky-high Silicon Valley real estate prices and rents. Just like we saw in the late 90`s tech boom.
BlackRock slashed its valuation on Snapchat by 24% last year, while Fidelity slashed its valuation on Dropbox by 31%. So things are about to change. Easy money will not be so easy now, which means it will be more difficult for many tech start-ups.
But some tech companies are still going strong.
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One of my favorite stock since 2005, are trading higher on friday. Alphabet Inc (GOOG) is up +2,59% on friday, trading at 745,46. EPS for Alphabet Inc is 21,26 with a market cap of 493,21 Billion.
Alphabet Inc was a big Monster last year, adding nearly 47% in 2015 and traded just below $800 in late December at an all-time high!
It is revealed that Google, in 2014, had paid Apple a sum of $1 billion in order to keep their search bar on the iPhone. Google obviously understand how important it is to have their own operative system on Apple`s iPhone.
Alphabet Inc is a collection of companies like Calico, Google`s health and longevity effort; Nest its connected home business; Fiber, its gigabit internet arm; and its investment divisions such as Google Ventures and Google Capital, and incubator projects, such as Google X.
Many investors have a buy rating with a target price of $850. Others up to $900. I look forward to Apple`s quarterly earnings report next Tuesday, and Alphabet Inc will report on February 1, 2016.
Shareholders are holding their breath to see if today`s rallies will continue.
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