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Technology Stocks : Investing in Exponential Growth
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From: Paul H. Christiansen10/13/2018 9:17:44 AM
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In China, a Dot-Com Déjà-Vu

We’ve seen it before: the crazy spending, the stratospheric valuations. Twenty years later, it looks like the dot-com boom all over again, but this time the players are much bigger—and Chinese.

A Beijing-based startup that lets consumers order coffee via smartphones raced into so-called unicorn territory—a $1 billion valuation—in seven months from launch. The value of another firm, billed as an “Uber for trucks,” has soared to 300 times 2017 revenue; Uber Technologies Inc. itself is worth only about 10 times revenue.

But where some investors see dynamic exuberance, others see a market increasingly threatened by a confluence of forces including onerous domestic regulations and global trade tensions. The biggest risk? Another dot-com reckoning, the Chinese version of a cycle that erased billions of dollars of value from America’s tech sector in the 2000s and chilled tech investment for years.

There are already signs of such a shake-out as China’s publicly traded tech companies were buffeted this past week by a global tech-stock selloff and jitters from the escalating trade spat between Beijing and Washington. While the broad Shanghai Composite was down 7.6% this past week, the tech-heavy Shenzhen market lost 10.1%.

Read More $ The Wall Street Journal
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