I Knew the Dot Com Bubble ….

By: Paul A. Jones

… and this isn’t it.

Seriously, one hot company (LinkedIn) doubles in price on IPO day, several dozen venture backed companies have gone public as May draws to a close, and the Chicken Littles of the investing world are issuing Bubble Warnings. Hello. I was around for the real Bubble. It happened after a year where not one but well over 100 hot companies at least doubled their price on IPO day. It was a year when almost 550 companies went public. It was a year where “business” models were denominated in eyeballs, not dollars. And it was an event where entire markets crashed, not a collection of highfliers.

I confess, I do not get LinkedIn’s valuation. And I expect that, over the coming months, there are going to be some more things I don’t understand. But so far, at least, these are things that (i) I don’t understand but can at least imagine without blushing; and (ii) are pretty well confined to a rather narrow sector of the market. As to my imagination, if you don’t see the difference between a LinkedIn and, say, a Boo.com or Pets.com, well, try harder. As to the breadth of the rally cum bubble, back then it was not just all of the Dotcom world but pretty much all of the tech world. Today, the “what are they smoking” valuations are pretty much limited to the social network sector (though there are, of course, some high fliers like Apple in a few other sectors).

In short, my guess is some people are going to get burned by some of today’s hot deals. But I’ll be surprised if there are any mass cremations.


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