For those who’ve been in the game long enough to remember, the original dot-com bubble burst only happened around 2000 and proceeded into 2001 you might notice some parallels to the lead-up to the great bubble burst; crazy valuations, way overpriced purchases, IPO’s and investment capital thrown around like confetti and what has been happening since late 2012.
Facebook recently announced it had purchased cross-platform messaging app WhatsApp for $16 billion dollars. That’s right, sixteen billion dollars. At 400,000 (four hundred million) users, Facebook has paid roughly $40 per user which is an extremely steep price to pay for a service that charges users after a long period of time $1 per year (and apparently there are ways to get around that).
It seems generous valuations and purchases are a thing again. I guess it is true that history repeats itself.
Welcome to bubble 2.0. I hope you’ve got your raincoats on, there are going to be a lot of tears from investors when it pops.