Me-too, In-Fashion Investing Fueling A Social Media Bubble

John Steuart

I was struck recently by a piece in The Wall Street Journal by Pui-Wing TamThe $1 Billion Club Gets Crowded, which highlights the amusing rate at which closely held, private US companies in the social media sector are garnering $1 billion-plus valuations. With 20 companies already fetching a 10-figure price tag— 15 of them since the beginning of last year— the bubble has swelled quickly. Even during the dot-com boom of the 1990’s, just 18 such start-ups were valued at $1 billion or more, as cited by Dow Jones Venture source.

Much of the “tulip mania” behavior creating the current bubble-effect is driven by copycats, uninformed late-stage investors, and, unfortunately, public market investors looking to find the next big hit among in-fashion Web companies.

I believe that the next great fortunes also will be made by those investing in new markets and out-of-favor sectors such as healthcare. I believe early stage investors could make great returns in innovations that keep us healthy longer than the next wave of overpriced me-too social media and web 2.0 stocks.

Investors like Claremont Creek see great opportunity in innovative energy, clean technology and digital companies. These are sectors poised for disruptive upside in private and public markets.

We seek out the next generation of Steve Jobs and partner with them and like minded investors who risk their time, capital and reputation to bet on a better future and remain ahead of the curve.

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Comments

  1. I believe that is among the most important info for me. And i’m happy studying your article. But want to observation on few basic issues, The website style is wonderful, the articles is really excellent : D. Good process, cheers

  2. D. – Thank you for the comment. With FB stock bouncing back 30% in recent days, the miscues of Morgan Stanley, NASDAQ, and Facebook’s board may soon be forgotten. The Bubble rally in social media
    may get an extended run. Be ready to have a seat in you hand when the music stops. One day, it will.

Reader Interactions

Comments

  1. I believe that is among the most important info for me. And i’m happy studying your article. But want to observation on few basic issues, The website style is wonderful, the articles is really excellent : D. Good process, cheers

  2. D. – Thank you for the comment. With FB stock bouncing back 30% in recent days, the miscues of Morgan Stanley, NASDAQ, and Facebook’s board may soon be forgotten. The Bubble rally in social media
    may get an extended run. Be ready to have a seat in you hand when the music stops. One day, it will.