tech share bubble companies burst many means

techsuch May 9, 2021 0 Comments

Tech Bubble Burst & What That Means# Tech Bubble Burst & What That Means# Are we approaching a plateau in the tech industry?Since the burst of the dot-com bubble in the early 2000s, many wonder if weare approaching yet another in the tech sector sooner than expected. A stockbubble refers to overvaluation and rapid share price growth in a sector on thebasis of expectation; in this case, the technological industry. It is usuallypunctuated with heightened investor demand and an increased number ofcompanies going public through IPOs. In an effort to align themselves with thenext “unicorn”, venture capitalists are throwing money behind start-ups thatcan provide no guarantee of a return on investment.According to Statista, seven of the top 10 companies in the world by marketvalue are in the tech sector, with spots 1–6 firmly in the hands oftechnology. Excitement in the potential of tech companies is unsurprising withthese statistics. The rise of Bitcoin from 10$ in 2014 to $20,000 in 2017(before dropping to nearly half that in 2018) has only fueled thoseexpectations, with many investors eager to back the next big thing. This kindof heightened interest, however, is fleeting and many tech IPOs have alreadydiscovered such for themselves.Even well-known players in the tech field have struggled in their bid to fileIPOs and capitalize on investor interest. Snap IPO closed its first day oftrading at nearly 25$ a share and the second at nearly 30$ a share. Threeweeks later, that decreased to only 20$ a share and today, is valued atapproximately 17$. Dropbox went public earlier this year in March and endedits first day at $29.89 a share but as of May 2018, it was reported thatDropbox has never been profitable, with a current valuation at $22. Even moresurprisingly, Fitbit filed for IPO in 2015 and rose above 51$ a share inAugust of that year and now has a valuation at below 5$ a share.# What does this mean for programmers?As of now, tech job growth remains strong, with over 10,000 new jobs listedevery month in the US and more expected in the next 5 years. Only 37% of techworkers are employed in the high-tech industry, however, with the remaining63% spread over other industries. This means that there is little risk thatprogrammers will no longer be employable should a tech bubble burst actuallyoccur. Some of the world’s largest companies are also the largest IT spenders,according to research firm IDC, with approximately 1/3 allocated towardsinternal IT and staff salaries & benefits. These companies include Walmart,Bank of America, Citigroup, and JPMorgan Chase. There are also a myriad ofjobs available in other industries including fashion (Chanel has beenexperimenting with designs using 3D printing), finance, media and more.

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