“Wall Street has soured on social media giant Facebook, online gaming company Zynga, and discount coupon concern Groupon, in favor of two familiar tech stalwarts now reaching new heights,” Sam Gustin writes for TIME Magazine. “Both Apple and Google are at or near all-time highs. Apple set a record Monday as the most valuable public company ever. (Microsoft still wins adjusted for inflation).”
“After years of hype, tech investors are finally fed up with Facebook, Zynga and Groupon. They’re fleeing to the safety of Apple and Google, both of which have proven business models, respected executive teams, and stellar track records of revenue and profit growth,” Gustin writes. “The disastrous stock plunges suffered by Facebook, Zynga and Groupon (down 50%, 70%, and 80% since their IPOs, respectively) have led many investors to a simple conclusion: The recent tech IPO boom was an insider’s game, in which Silicon Valley venture capitalists and Wall Street bankers worked together to inflate pre-IPO valuations, allowing insiders to reap billions in cash, leaving public market investors hanging out to dry.”
Gustin writes, “Apple and Google, by contrast, are two of the most impressive global business stories of the last decade. These companies make incredible products, dominate their respective industries, and mint billions in profits every year… What company savors going head-to-head with Apple in the scaled hardware/design space? What company would be thrilled to try to tackle Google in the web search advertising space? Perhaps most importantly, both of these tech icons are funneling sizable profits back into research and development, laying the groundwork to thrive in the years ahead.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]