Are we in a bubble or not? Google’s Executive Chairman Eric Schmidt thinks the idea is worth paying attention to. He isn’t declaring we are in one but he says either the revenue growth of these new tech companies is so large that the valuations are justified or that there is a liquidity squeeze where a large amount of capital is chasing a small amount of shares.
Bottom line is we don’t know if we are in a bubble – but we will likely learn if we are in 2012 when much of the share lock up periods expire.
Interestingly, he mentioned that although many people said Google was overvalued when it went public, it never dropped below its offering price.
Gary Kim at IP Carrier has more.