In the Information Age where tech reigns supreme, there is no other single industry economists are pointing to and saying “this is the future of our markets.” That said people are envisioning that tech companies will fall in line and fill the void and toe the line of past markets and fullfill the norms of how our supply side based economy works. Everyone is expecting this of tech and working towards this future;everyone that is except for burgeoning tech companies themselves. The Biggest Difference in this regard is their aversion to become publicly traded companies on the global stock market. To put this aversion into perspective for the first time since the great recession of 2009 not a single tech company went public in the last fiscal quarter.
This is largely due to the fact that if we look at the initial public offerings markets in tech as a reservoir we can see that, that baby has been drank dry and there is not much in the well for new companies to plan their public status around. To put this in perspective 2 years ago no less than 62 tech companies went public. Since the Silicon Valley became the Silicon Valley in the 1990’s there has only been 3 other quarters without an IPO: the third quarter of 2002 and the first quarter of 2003 and the first quarter of 2009. All three of such quarters were the result of economic slowdowns, the first being the burst of the dot-com bubble starting in 2000 and then the onset of the great recession of 2008.
Even though $62.5 billion, Uber has not yet gone public and all signs point to the possibility that they won’t. Six biotechnology companies went public this past quarter and raised a valuation of $574.5 million. That sounds like an astronomical amount of money it was actually the lowest total amount raised since the third quarter of 2011. These figures are coming from the National Venture Capital Association. This is not the only looming disaster coming out of the Silicon Valley.
Two of the biggest IPOs were actually Geographically removed from Silicon Valley. The are Editas Medical which is based in Beijing and Cambridge Massachusetts. Beigene took home a whopping $182.2 million in there IPO. This trend when analyzed by an independent firm found that only 17 percent of new tech companies are even trying to go public. “I’m a little perplexed as to why this drought is continuing as it is,” says University of Florida professor Jay
This trend seems to point to one thing:bubble. “While this may cause some to panic, venture capital is a long-game business and seasoned venture investors have lived through these slowdowns before,” Franklin says.
It is going to be scary to see how yet again this trend will come to fruition where in the American speculators see something with no tangible value and give it an insanely high IPO prediction. For instance the trend to give useless companies such as snap chat valuations of billions and billions of dollars. When the chickens come home to roost and investors say “alright where is the money from this investment” all all they have to show for it is a 7 second video of a party we can rest assured that baby is gonna pop, and pop in a big way.