"Is it 20x revenue or 3x revenue? There has been no bottom to that," he said.īravo said tech firms can make a case that they can wait out the cycle and get a better valuation, but with an economy that is slowing down, their problems may only get worse if, on top of no profits, their revenue decelerates, too. Global investors were happy buying growth regardless of economics when rates were zero, but "now they want profitability, so what's a company worth that is growing at 30% and making no money?" Bravo said. For their part, many investors still aren't sure if the valuation hits already taken are enough. Some private tech startups that could be potential sellers have not yet decided to accept the current valuation reset as valid and will attempt to wait out this market. There was a sharp and "immediate value reduction from where the market was," said Orlando Bravo, founder and managing partner of private equity firm Thoma Bravo, speaking at CNBC's Delivering Alpha conference on Wednesday, but not all tech companies and investors are on the same page.
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