The number of unprofitable companies going public has hit 'tech bubble levels,' BAML says - Business Insider

The number of unprofitable initial public offerings has swelled to "tech bubble levels," according to a new report from Bank of America Merrill Lynch.

According to the firm's analysis, the proportion of unprofitable companies going public has reached 70%, the highest since the peak of tech-industry exceess roughly 20 years ago. This dynamic is shown in the chart below on both an earnings and EBITDA basis.Investors have poured money into unprofitable companies in recent years amid low interest rates and slow growth, according to BAML. But now theas 2019's once-booming initial public offering market begins to sputter.

"Recent IPO withdrawals could be a warning sign that investors are shifting focus to profitability amid macro concerns," BAML strategists said in note to clients on Monday. The firm continued: "The potential ripple effect could be significant — tech innovation has been one of the biggest deflationary factors and if companies start focusing more on profitability via pricing, we could start to see an upward pressure in inflation."

Talked about this last year. It's ' irrational exuberance' or deja vu all over again as Yogi Bera would call it.

Canada Canada Latest News, Canada Canada Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

WeWork's office phone booths may have dangerous levels of formaldehyde - Business InsiderWeWork says thousands of its phone booths could have dangerous levels of formaldehyde after people complained about odor and eye irritation Need get in on this ipo. Immediately
Source: BusinessInsider - 🏆 729. / 51 Read more »

Cyberattacks now cost small companies $200,000 on average, putting many out of businessAbout 43% of cyberattacks are aimed at small businesses. On average, these cost $200,000, putting 60% of these companies out of business in six months. Maybe their cyber security should offer insurance. Guess shouldnt tried expand into unknown domain jurisdictions vary smart people attn quailty of 'product' environment routing worth from value highly qualified put out with detailED attacks only grids office formations mindfulness nothing can do sourcing validity authority Maybe DKBInnovative should be considered first?
Source: CNBC - 🏆 12. / 72 Read more »

Venture capitalists look for more than TAM and valuation - Business InsiderThe Foundry Group director who's funded Fitbit and Zynga explains why market size is the most overrated factor for VCs investing in early-stage startups
Source: BusinessInsider - 🏆 729. / 51 Read more »