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.
(Click the image to enlarge)
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.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
Ket Garden
Shiny bull 