Technology Sector Privite Equity and a New Speculative Bubble - Term Paper Example

Comments (0) Cite this document
Summary
Technology Sector Private Equity and a New Speculative Bubble C.J. Bordeleau Economics May 27, 2015 Technology Sector Private Equity and the Emergence of a New Speculative Bubble The rapid valuation growth of young private technology companies such as Facebook and Twitter is something that is often been highlighted in the media in recent months…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.5% of users find it useful
Technology Sector Privite Equity and a New Speculative Bubble
Read TextPreview

Extract of sample "Technology Sector Privite Equity and a New Speculative Bubble"

Download file to see previous pages Goldman intends to resell many of the shares to high net-worth individuals through its wealth management division. This “special investment vehicle” will exploit a loophole in securities law regarding private company ownership. According to US securities law, a private company is not permitted to have more than 500 individual investors without making its financial information public. Being a private company, Facebook is not required by the SEC to share financial information with investors at this time. Due to these above mentioned conditions surrounding these companies, speculation continues to be a driving force surrounding these investments. In this paper, we will take a look at the history and features of speculative bubbles including the technology bubble of the late nineties (dot com bust) in an attempt to use economic data to analyze today’s environment to detect the presence of a bubble and its potential impacts. The Origins of Speculative Bubbles Speculative bubbles have long fascinated and puzzled economists across many time periods. From the original Tulip Mania of the 1630’s to the Dot- Com bubble of the late nineties, these phenomena have kept economists on their toes for centuries, in trying to pin down substantive causative agents that are responsible for the swift increase in the market values of particular assets. Till today, experts have been unable to chalk down exact reasons for the emergence of such bubbles as they can rise up even in the most predictable markets; where the market participants can very accurately calculate the intrinsic value of the assets and where speculation plays no part in the actual valuation process. What is the origin of bubbles? Simply put, speculative bubbles are caused by “precipitating factors” that have the ability to bring about a change in the public’s perception about the value of an asset and about the future prospects of that asset, which can have an immediate impact on demand (Shiller , 2000) One of the most famous economists of all time, John Maynard Keynes pointed out in his book “The General Theory of Employment, Interest and Money”, that abrupt and immediate stock price changes have their roots in the “collective crowd behavior” of the various market agents more than anything else and that in almost all such scenarios, these rises in prices have little to do with the values that can be derived from “careful analysis of present conditions and future prospects of firms”. This seems to be a certainly accurate description of the conditions which surround the emergence and bursting of the speculative bubbles as seen in the past. Kindleberger in his book “Manias, Panics and Crashes: A History of Financial Crises” (1978), presents a summary of his observations regarding the historical pattern that these bubbles usually follow. He states that the increase in prices typically starts with the emergence or birth of opportunity, usually in the shape of new markets or cutting edge technology or some major change in the political landscape of a particular region which can pull in investors looking for excellent returns on their investments. This is followed by rising prices of the particular asset. In this phase, more and more people rush after the overpriced commodity, feeding fuel to the bubble, increasing prices further and feeding the mania, and at the same time causing credit ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Technology Sector Privite Equity and a New Speculative Bubble Term Paper”, n.d.)
Retrieved from https://studentshare.org/environmental-studies/1422351-technology-sector-privite-equity-and-a-new
(Technology Sector Privite Equity and a New Speculative Bubble Term Paper)
https://studentshare.org/environmental-studies/1422351-technology-sector-privite-equity-and-a-new.
“Technology Sector Privite Equity and a New Speculative Bubble Term Paper”, n.d. https://studentshare.org/environmental-studies/1422351-technology-sector-privite-equity-and-a-new.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Technology Sector Privite Equity and a New Speculative Bubble

New technology

...Technology Introduction The advent of computers has revolutionized the mode of life for humans. It would not be wrong to say that mankind has leaped to a new level due to the different inventions of the current times. All walks of life have been improved due to the integration of computing technologies and devices. Technology has always worked to improve lifestyles of humans. Researchers and software developers have not only worked to make life better for people with traditional needs, they have also played their role to invent new tools and technologies for individuals who have special needs. 2. New...
3 Pages(750 words)Research Paper

2006 New York Housing Market Bubble

.... The wealthier an individual becomes, the more he has the willing power to consume and thus, the more he will consume (Frank, 2009). The New York economy experienced changes due to the housing bubble. Before the market bubble came to be realized in the year 2006, the revenues related to real estates had increased tremendously, but with the housing market bubble, the revenues collected in the form of taxes from the real estates decreased drastically. The decrease in tax revenues could be attributed to the weaknesses in carrying out the housing transactions. There was a decrease in the growth of GDP since it grew at a lower level from the previous years. Private...
4 Pages(1000 words)Research Paper

Impact of New Technology In the Public Sector In England

...? Metropolitan Police department in England have exponentially embraced the use of information and technology in their service provisions. They have invested huge amounts of money through the government in implementing the Automatic Number Plate Recognition with the objective of improving the quality of their services to the citizens. The police departments are aggressively adopting this technology. However, much has not been done to find out the effect of this new technology on service delivery and customer satisfaction in the police sector. This study therefore, sought to establish the effect of Automatic Number Plate Recognition on security issues in...
7 Pages(1750 words)Essay

New Technology

...of production has to be maintained. Technically, changes in organizations are designed to make firms competent. Essentially, training mechanisms are modified to improve the skills and competency of the workforce. Technology replaces the traditional tools to boost production and limit defects. The change happens when the form concentrates on the development of the new discovery. Real change, however, according to Beer et al. (1990) is realized when the new project lives up to its billing or produce results beyond expectations. Also, change is made to make organizations more flexible. Flexibility is an important characteristic that firms have to obtain. Definitely, flexible firms are able...
10 Pages(2500 words)Essay

Speculative Development Project

...Speculative Development Project: Brunswick Building in Bloomsbury London The Brunswick in Bloomsbury, London is being restored by the company Allied London. The development would encompass over 55,000 square meters which is about 6 acres. There was the question of whether or not the centre should be redeveloped. When the Brunswick Centre was first conceived as high-rise housing. However, most people were behind a more fragmented idea of what is called city diversity. Another problem, the Centre was not coming down to street level, and its stepped section prevented its bulk from overpowering in close-up views. At a distance it ...
20 Pages(5000 words)Assignment

New technology

...Today the most popular culture is the culture of internet to the extent that people’s values, beliefs and attitudes have been altered due to the sheer amount of time they spend on the internet. If they were to look for some information or search for a book, instead of visiting a library, the first action would be to browse on the net. The internet has evolved over the years and the latest technology used is the web2.0 tool. This technology has changed the way people interact or exchange views, share files or even study. Web2.0 technology is the second generation of Web-based services and tools that emphasize online sharing and collaboration among users (Carpenter and Steiner 2005). It...
5 Pages(1250 words)Essay

Technology Sector Privite Equity and a New Speculative Bubble

...Technology Sector Private Equity and a New Speculative Bubble C.J. Bordeleau Economics September Technology Sector Private Equity and the Emergence of a New Speculative Bubble The rapid valuation growth of young private technology companies such as Facebook and Twitter is something that is often been highlighted in the media in recent months. With estimated valuations (from secondary markets) at $76 billion and and $7.7 billion respectively, it is hard to ignore that these private companies have certainly gained investor...
10 Pages(2500 words)Term Paper

New technology development in the primary sector

...al Affiliation) NEW TECHNOLOGY DEVELOPMENT IN THE PRIMARY SECTOR Question The primary sector involves the extraction orharvest of products from the earth. It includes the production of basic foods as well as raw materials. Another way to describe it would be to say that it is involved in the growing, harvesting, extraction, and sometimes processing of raw materials which form the basis of the products we need in our everyday lives. Activities associated with it include mining, fishing, agriculture (both subsistence and commercial), quarrying, farming, hunting and gathering, forestry, and grazing. In addition to the aforementioned activities, the packaging and processing...
4 Pages(1000 words)Assignment

New technology

...New technology Introduction Information management is a process of gathering and managing data or information from various sources. Information management aids an organization to gather, manage and deliver appropriate information in a timely manner. Cloud computing is a contemporary way of managing as well as sharing information over the internet or network. Cloud computing allows businesses and individuals to use hardware and software provided by third parties. It allows in accessing computer resources and information with the availability of network connection from any location. In this context, cloud computing is identified as a bridge between resources or information stored internally as well as...
2 Pages(500 words)Admission/Application Essay

Information Technology Sub-sector Analysis

...Mobile Application Systems Analysis Information Technology Sub-Sector Analysis Using Porter Four Competitive Analysis Inevery industry, competition is the order of the day. Consumers will compare and analyze different products from different manufacturers before making purchases decisions. Its the duty of each and every organization to make sure that their products are of high quality and standard quantity to make them attractive to the consumers. Industry environment usually has a direct effect on the strategic actions of a firm. Four force model of competition will be used to analyze the mobile application system. It entails four forces outlined below (Demetriades, 2012). Porters four analysis gives two dimensions that define... the...
2 Pages(500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Term Paper on topic Technology Sector Privite Equity and a New Speculative Bubble for FREE!

Contact Us