Andreessen says no new high tech bubble

June 2, 2011
LinkedIn CEO Jeff Weiner (centre) walks to the trading post at the New York Stock Exchange during the initial public offering of the company last month. LinkedIn's share value more than doubled on its first day of trading.

Netscape co-founder turned Silicon Valley venture capitalist Marc Andreessen on Wednesday rejected recent speculation about a new high-tech bubble.

"There's a very large number of people who think there is a bubble, (but) the key characteristic of a bubble is that everybody is convinced there isn't a bubble, which means there isn't a bubble," he said.

"Generally, if everybody is upset, that's a good sign... I hope people will think there is a bubble because it will price it down," he added, during an address at the All Things Digital conference here.

He went on to note that the price-to-earnings ratio of industry giants like Apple, Microsoft, Google and Cisco is exceptionally low, indicating they are undervalued, which would be the opposite of a bubble.

"It is absolutely unprecedented to have companies that are this important... making this much money. These are unbelievably successful companies," said Andreessen, who launched Andreessen Horowitz last year.

When asked about the recent (IPO) of professional social network LinkedIn, which saw its share value more than double on its first day of trading -- he said it reflected investor interest, not a bubble.

"It's only one company. Number two, it only just went public. Number three, there's very little float. Number four, the public market is starved for growth .. and is growing very fast," Andreessen said.

He went on to argue that a clutch of companies like the bargain site Groupon and social network Facebook -- expected to eventually launch IPOs of their own -- have a combined price-to-earning ratio less than that of Google.

"Take all the later-stage companies that everybody is talking about... Collectively the entire (theoretical) valuation is less than Google, when has a price-to-earnings ratio of 10," which is low, he said.

Explore further: In reminder of '90s, LinkedIn has big first day

Related Stories

In reminder of '90s, LinkedIn has big first day

May 20, 2011

(AP) -- There was an unmistakable echo of the dot-com boom Thursday on Wall Street. LinkedIn, a trailblazer in the online networking craze, went public with a roaring stock offering. Within minutes, shares were trading at ...

LinkedIn IPO stirs Internet bubble fears

May 18, 2011

LinkedIn, the professional-networking website firm, said Tuesday it expects to be worth as much as $4 billion when it goes public soon, sparking fears of another Internet bubble.

LinkedIn raises IPO ante amid high investor demand

May 17, 2011

Investors are clamoring to connect with the online networking service LinkedIn Corp. in the latest sign of the fervor for Internet companies that specialize in bringing together people with common interests.

Recommended for you

Volvo to supply Uber with self-driving cars (Update)

November 20, 2017

Swedish carmaker Volvo Cars said Monday it has signed an agreement to supply "tens of thousands" of self-driving cars to Uber, as the ride-sharing company battles a number of different controversies.

New method analyzes corn kernel characteristics

November 17, 2017

An ear of corn averages about 800 kernels. A traditional field method to estimate the number of kernels on the ear is to manually count the number of rows and multiply by the number of kernels in one length of the ear. With ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.