Uber's Disastrous IPO:
Yet Another Sign the
End of this Bubble is Near
Harry Dent | May 13, 2019 | Markets were badly shaken this morning as news of China's planned tariffs on $60 billion worth of U.S. goods hit the wire. I emailed Boom & Bust subscribers earlier with an update on my Dark Window scenario, and some insights into what to expect over the next few months. I've labelled one possible outcome "Holy Crap," so you might want to check it out. All the red across the board isn't doing Uber any favors. Talk about bad timing for an IPO. But even before markets began correcting, the ride-hailing company was not feeling investor love. It's the 4th worst IPO in the last decade, closing on its first day 4.5% below its launch price. That's unusual. These IPOs are priced a bit below what's perceived as fair value and investors almost always fight over the stock right out of the gate. Not Uber though, and it's another sign that we're in the late stages of the tech and global stock bubble. When we were in the late stage of the last tech bubble, in 1999, a swarm of Internet stocks with no profits, and only some with little sales, came out of the woodwork with super-high valuations. That's what I call the infancy stage of a new technology where you actually see the most extreme bubble versus valuations (something Rodney will be talking more about in the coming weeks). The next S-Curve wave emerges on a tiny scale as the previous S-Curve is peaking after surprising everyone with its growth and scale. That makes the new companies look like the next big thing. They may well be the next big thing, but not right at the beginning of the curve. Yet, investors always over value technologies in their early stages… when they're small, unprofitable, and slower to have impact. Even worse… READ MORE » Trending Stories... Markets look to finally be making a much-needed correction, triggered by the U.S.-China trade deal drama. Everyone seems to think a deal is around the corner. Not me. While this trade war hurts them, they have a long-term goal, and they're prepare to take all the pain in the world to achieve it. I recently had dinner with my extended family. Afterwards, my parents mentioned they were surprised at how expensive the meal had been. It was a nice restaurant, but nothing fancy. It worked out to roughly $50 apiece, before tip. As we left, we separately climbed into our newish cars, which all cost more than $40,000. My brother-in-law's pickup tops out over $50,000. U.S. markets have had a bad week. After reaching all-time highs recently – the Dow at 26,656.39 on April 23 (not quite new high), the S&P 500 at 2,945.83 on April 30, and the Nasdaq at 8,164 on May 3 – they've spent the last three days in the red. Monday, the Dow shed as much as 1.8% before pulling back to close only slightly lower. On Tuesday it had bled 1.8% by the close. The Nasdaq dropped 2.2% during trading before clawing some of that back. It ended trading on Tuesday 2% down. |
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