Not logged in.

Quick Search - Contribution

Contribution Details

Type Master's Thesis
Scope Discipline-based scholarship
Title Are the high valuations of the social media IPOs and the development of the stock price in the technology sector signs of a recurrence of a bubble in the US stock market?
Organization Unit
Authors
  • Stefan Hungerbühler
Supervisors
  • Michel A. Habib
  • Jakub Rojcek
Language
  • English
Institution University of Zurich
Faculty Faculty of Economics, Business Administration and Information Technology
Number of Pages 57
Date 2014
Abstract Text Executive Summary Thesis Question A number of high profile Initial Public Offerings (IPO) of social media companies in the United States have attracted worldwide attention in the last few years. Companies like LinkedIn (2011), Facebook (2012), or Twitter (2013) were the most prominent firms in the social media sector that went public in that time period. The very high valuations of these firms on their first trading day or shortly thereafter have raised the attention of analysts and other observers of the US stock market. The current situation in the US IPO market is reminiscent of the events dur-ing the dot-com bubble. Sceptics have pointed to the recent trend in the US IPO market, warning of the development of another asset bubble similar to the one in the technology sector in the late 1990s. Most recently, the US Federal Reserve (2014) stated in their Monetary Policy Report that the valuation metrics for companies in the social media industry seem to be substan-tially stretched. This paper’s objective is to analyse if the development in the IPO market in the United States is in-deed an indication of a potential bubble. In order to do that, key figures for US IPOs are studied. The analysis is carried out in two steps. In the first step, it examines whether the current overall IPO market shows signs of a bubble. The second step of the analysis focuses on social media com-panies, and examines the social media subsector for bubbles.
Export BibTeX