Is the hot tech IPO market a bad sign? – The Wall Street Journal
DUBLIN — Next year is shaping up to be a big one for tech IPOs. Companies like ride-hailing firms Uber and Lyft and data-mining specialist Palantir are planning to debut on the stock market. For years, investors have eyed these companies, wishing that they could get a piece of the action. Now, at last, they will be able to, starting with the early 2019 Lyft IPO. But is this good news or bad news? After all, these companies are all owned by private equity firms. And private equity firms have a history of unloading their positions when the market is red hot, leaving investors holding the bag when market valuations come back down to earth. In other words, is the spate of listings a sign that the market is too frothy and that valuations are stretched? Perhaps not. After all, there have been plenty of major tech IPOs over the last few years, including Snap and Blue Apron (both of which performed poorly after the initial excitement died down). But we're fairly late in the cycle now, and the market for tech companies is looking a bit shaky. There was a significant rotation out of the tech sector two weeks ago. Perhaps this burst of late-cycle IPO action is a sign that the good times are winding down. – Felicity Duncan
By Maureen Farrell, Rob Copeland and Corrie Driebusch
(The Wall Street Journal) After years of remaining on the stock market's sidelines, a number of highly valued Silicon Valley technology companies are now gearing up to go public as soon as next year.
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