On Tuesday the Wall Street Journal reported the results from a survey of bankers which found that three quarters of respondents believe that the ‘valuations of many private internet businesses aren’t justified’. The survey went on to ask what was driving the prices up, with the following results:
- 34% believe it is down to demand for pre-IPO shares outstripping supply
- 25% believe it is down to the growth of the internet itself
- 22% put it down to businesses’ profitability
- 19% thought good performance from recent internet IPOs is the cause
The first and last of these both refer to market dynamics and the second ‘growth of the internet’ is too vague and broad to be anything other than a catch all ‘we think the market is hot’ which means that only 22% of the respondents believe the valuations are being driven by fundamentals.
To read the full, original article click on this link: Even bankers believe web company prices are inflated « « The Equity KickerThe Equity Kicker
Author: Nic Brisbourne
