Elliott Wave International | World's Largest Market Forecasting Firm Since 1979
Please Login
   
| What's My Password?
 
 
Alert
May 24, 09:26 AM
Robert Prechter's expanded, 21-page May Elliott Wave Theorist (published monthly since 1979) shows you 23 charts that explain why "The monetary-financial world seems to be setting up for an epic battle." Start your risk-free trial subscription now -- and get your 2nd month FREe >> 

Home > U.S. Economy
Bedazzled by the Bull: Zooming in on IPO Zaniness
A Reminder of Past Market Tops

By Bob Stokes
Tue, 08 Mar 2011 17:15:00 ET
Add to Facebook Add to Twitter Add to Facebook Printer Friendly Get the RSS feed Add to more social media services
Get Elliott wave insights like this article when you sign up for EWI's free email newsletter, The Independent. It will change the way you view the markets forever. Privacy

If you've ever played the Internet puzzle game "Bejeweled," you've seen the colorful gems it features.
 
The browser game debuted in 2001, and is now up to "Bejeweled 3" in the series. The number of downloads has reportedly reached 150 million.
 
And now it appears that the head of the company which owns "Bejeweled" has been bedazzled by today's bullish sentiment:
 
"Investors looking for a chance to get a piece of the fast-growing social network gaming and mobile gaming spaces could have the opportunity by year’s end.
 
"PopCap Games, known for such titles as 'Bejeweled,' 'Bookworm' and 'Plants vs. Zombies,' is mulling an IPO."
CNBC (3/6)
 
The same article says PopCap is the third largest Facebook developer. Facebook itself was recently valued at $60 billion.
 
Investor interest in privately held Web companies such as Facebook, Zynga and Groupon...is surging.
Reuters (1/28)
 
The social networking website LinkedIn filed for an initial public offering in January. The same Reuters article quote above reports that while LinkedIn made a profit in the past two quarters, the company does not expect to be profitable in 2011. The same report commented on LinkedIn's shares:
 
"Some privately held shares are traded on secondary markets...But their value so far has depended more on buzz than fundamental knowledge of the company's finances."
 
The latest Elliott Wave Financial Forecast talks about what the climb above Dow 12,000 has "brought out" --
 
"... the zaniness...compares to that of the Internet bubble of 1999 and the leveraged buyout boom of 2007. As the Dow pushed to its February 18 high at 12,391, the IPO pipeline was stuffed with 50 LBOs, and social networking websites moved from a cultural phenomenon to a Wall Street rage."
 
Indeed, here's what the Financial Forecast said in March 2007, a few months before the stock market peak:
 
"...January leveraged buyouts totaled over $189 billion, the highest January total since the 2000 peak." 
 
Increasing economic confidence drives the large number of initial public offerings that cluster around market tops -- from Internet start-ups to big corporations to social networking companies. The same optimism is evident at each top: only the names of the companies change.
 
The latest Elliott Wave Financial Forecast identifies what could change the "deal flow" in a way which could last "years to come." We've seen how financial and economic changes can rapidly unfold in recent years. Prepare now for the likely changes ahead by following this link for your risk-free read of the March, Elliott Wave Financial Forecast.
 

Tags: bull market, herding, investor psychology, mania, sentiment, social mood
Rating: - based on [11 rating(s)]
Rate this content: