A correcting bubble
Uber is worth more than $40 billion, secretive data mining outfit Palantir has a valuation of close to $10 billion, plus it’s looking to raise a whopping $500 million, writes Steve Mullins. Silicon Valley venture capital firms keep on pumping huge volumes of finance into digital start-ups in the hopes of grabbing huge payoffs at IPO time based on some high-risk/high-reward valuation model. A bubble? There are now some 48 private US companies valued at $1 billion or more, versus 27 at the start of the year, according to Dow Jones VentureSource. And that’s a record number. Even during the top of the dotcom boom, there were just 10 such firms.
“Any disconnect between private and public market valuations is ephemeral, and corrects very quickly,” David Weild, CEO of investment bank IssuWorks and former vice chairman of Nasdaq, told Dow Jones. “Markets are ultimately very rational.”