Dangers of Too High Tech IPO Valuations

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Feb. 25 (Bloomberg) –- B. Riley & Co. Chairman Bryant Riley discusses what’s driving high tech IPO valuations and what it means for the industry. He speaks to Cory Johnson on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

Of industries.

You are chasing this evaluation that wall street will get you if you aren't bloomberg growth company.

It is almost like utilities.

They are returning cash and getting rewarded for dividends and buybacks.

They can grow that much.

They are reacting in a muslim direct opposite now.

I prefer to own those done the ones chasing revenue.

You guys cover so many companies.

I wonder when your analysts are covering those companies, are they talking to them about hate, the fed is tightening or china is slowing down.

Do you want to change what you plan your business?

I would think that would be above their -- not a great, but if they are starting -- they should not cover that company.

The companies we want to cover our companies that have good management and think about their businesses.

React to some of that news.

They need to focus on the customers and the margins.

They should be getting guidance.

And companies -- do you think; dr.

Companies have been around -- they put themselves in the stronger financial position are recognizing that hardware is not something like it used to?

I think it is driven more by shareholders and activists.

The gravy train of being a board member and a ceo is a good gig.

I think you listen to the shareholders.

That does not mean they are not trying to do the right thing.

It is 1% money.

They are returning cash for a variety of reasons.

Did get a sense investors are recognizing the shift in the markets or the fed talking about the commodity prices in the last two months?

Is that changing the way they're starting to look at some of these big growth companies and think about their investment?

It feels to me like a supply and demand market and not so much that thoughtful.

I'm not saying that there aren't five fund investments.

It seems like the market is being driven by a lot of cash and not enough public names.

I think what is happening are the mutual fund manager gets money in and he the work in the same names.

It is kind of an easier way to manage.

Clearly a lot of guys do a lot of work.

Right now what we are seeing the way the market never seems to go down is a supply and demand.

Do you think it was a lot more ipos as a result because of the demand?

Right now does not feel like the bell is close to ringing.

What i hope we see is quality ipos and i would love to see some of the jobs market intentions take place for smaller companies to generate cash and they need access to the public market, but cannot spend all the money to be public here at i would love to see that smaller company ipo.

Not -- you must a lot of companies that come out public.

I think you seeing that with biotech.

I'm not a biotech analyst, but they are taking a lot of companies public.

They're easier to put big valuations on.

I would love to see good or small companies that cannot afford to spend all of the money with the traditional ipo and raise money in the public markets.

They are making acquisitions and building a business, but not growing at 100%. are we seeing the stills?

Not yet.

I think you are seeing the most high profile, the ones that are the biggest.

Of those are the ones that are going public.

What i'm afraid of is that it will result in companies that are related in some way to these big companies, but have good business models.

There is clean tech and the chinese place.

I'm fearful that wall street will start to take advantage of that environment.

That was brianyant riley.

This text has been automatically generated. It may not be 100% accurate.

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