2016


Will theTech bubble burst in 2016?

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It´s been 15 years since the dot-com bubble burst that caused a stock market loss of $ 5 trillion from 2000 to 2002, and recently, a lot of debate has been circling about a new tech burst.

The worries among investors are driven from one hand by the wide emergence of Unicorns (private firms with valuations greater than $ 1 billion) for the past decade in Silicon Valley fueled by Venture Capitalists as they represent very rare investment opportunities. According to Forbes ranking dated August 2015, they identified 80 Unicorns among which Uber was holding the first position and valued at $ 51billion, followed by Xiaomi at $ 46billion and Airbnb ranked 3rd at $ 25.5 billion.

On the other hand, some strategists are recommending a shift away from the FANG stocks (Facebook, Amazon, Netflix and Google) fearing that their surreal performance in 2015 might fall this year. These stocks saw an 86.5% increase year-to-date as of December 31, 2015, generated 16% of total S&P earnings in 2015 while they represented only 1%, and surpassed the bottom 10 performing stocks on S&P by 150 points.

But will the investors´ awareness of tech risks succeed in avoiding a second burst?

 

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