Tech Bubble Talk Brewing
Chinese Internet juggernaut Alibaba has made it official: the company will be going public in the U.S. and the deal is going to be enormous. Described as a hybrid of EBay (NASDAQ:EBAY) and Amazon (NASDAQ:AMZN) Alibaba is expected to raise $15 billion. That would make it the biggest IPO since Facebook Inc (NASDAQ:FB) raised $16 billion in 2012 and give Alibaba a total value of about $130 billion.
After sitting moribund for years in the wake of the dotcom implosion of 2000 and the financial meltdown of 2008, the IPO market roared to life in 2013. More than 220 companies raised $55 billion last year and 2014 is off to an even faster start. While the boom delights VCs and investment bankers there are those who see more than a bit of irrationality in the public’s appetite for new issues.
“The Fed has managed to create a bigger stock market bubble than the one we had in the 1990s and a bigger real estate bubble than the one that burst in 2008,” shouts Euro Pacific Capital’s Peter Schiff in the attached video. “Imagine how bad it’s going to be when these two bubbles burst simultaneously.”
Watch the video below for more details: