Bubble #10: Tech start-ups, IPOs: The
market for IPOs has been very frothy of late with first day gains of 100% in
some cases. Of recent IPOs - Twitter is up 64% - to $42 from its IPO price of
$26 - even though it is yet to report a profit. Potbelly Corp., a sandwich
restaurant chain, went public at $14 and now trades at about $30, up over 100%.
Encouraged by this highly receptive market, many other start ups without
profits - such as Chegg that just went public on Wednesday - are also hitting
the market - raising hundreds of millions in cash and garnering billion-dollar
valuations on zero profits. It's sort of like the go-go dot-com days and many
analysts are wary of these eyebrow-raising valuations.
So there you have it - 10 potential
bubbles... which I plan to follow through the end of Obama's term. And while
we've identified these ten, I wouldn't be surprised if there's something
completely out of left field that hits us and takes markets down... only time
will tell.
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