Posted On: 03/05/2015 7:26:34 AM
Post# of 63824
Mark Cuban
thinks the tech bubble has returned in a far more dangerous way
The crux of his argument: While the tech bubble of 2000 was essentially a public stock bubble, today's bubble is in the private investment realm, leaving those who are in too deep no way to escape. Thousands of angel investors have sunk large sums into private companies, but have no mechanism to liquidate their investments if there's trouble. They can't sell their position, even if they realize it was a mistake.
I have absolutely not doubt in my mind that most of these individual Angels and crowd funders are currently under water in their investments. Absolutely none. I say most. The percentage could be higher
Why ?
Because there is ZERO liquidity for any of those investments. None. Zero. Zip.
[...]
The only thing worse than a market with collapsing valuations is a market with no valuations and no liquidity.
If stock in a company is worth what somebody will pay for it, what is the stock of a company worth when there is no place to sell it ?
thinks the tech bubble has returned in a far more dangerous way
The crux of his argument: While the tech bubble of 2000 was essentially a public stock bubble, today's bubble is in the private investment realm, leaving those who are in too deep no way to escape. Thousands of angel investors have sunk large sums into private companies, but have no mechanism to liquidate their investments if there's trouble. They can't sell their position, even if they realize it was a mistake.
I have absolutely not doubt in my mind that most of these individual Angels and crowd funders are currently under water in their investments. Absolutely none. I say most. The percentage could be higher
Why ?
Because there is ZERO liquidity for any of those investments. None. Zero. Zip.
[...]
The only thing worse than a market with collapsing valuations is a market with no valuations and no liquidity.
If stock in a company is worth what somebody will pay for it, what is the stock of a company worth when there is no place to sell it ?
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