Global chair, Tech Media & Telecom Investment banking at JPMorgan Chase & Co. (NYSE:JPM) Jenifer Nason believes it is early to start speculating that a tech-bubble could occur anytime soon, just as it did in 1999-2000. Her remarks come in the wake of tech deals valuation skyrocketing by 41% in the third quarter to a high of $73.7 billion. During an interview on CNBC, Nason reiterated that markets remained fundamentally robust and expected to be of benefit to the likes of Facebook Inc. (NASDAQ:FB) Google Inc. (NASDAQ:GOOGL) and Twitter Inc. (NYSE:TWTR) in terms of valuation.
“I think everyone is waiting for the repeat of 1999-2000 and so the bursting of the tech bubble, and I don’t think we are in anything like the same situation we were then. Will there be volatility around valuations? Will we see more successful business models than others? Sure we will, “said Mrs. Nason.
As the likes of Facebook Twitter Inc. (NYSE:TWTR) and Google continue to devote more money on investment opportunities, Nason argues that the tech space could grow even further on the current margins. There has been a major transition from the bubble boom of 1999 where a number of companies failed to live to the hype in terms of performance. The likes of Facebook Inc. (NASDAQ:FB) Google Inc. (NASDAQ:GOOGL) are now making enough money having grown their EBITDA over the years according to Nason.
Financial growth according to Nason has allowed most of these companies to push on with other growth opportunities such as acquiring other companies. Unlike the tech bubble era, Twitter Inc. (NYSE:TWTR) and the likes in the tech space are now making profits to the likings of their investors. Some of the recent mega deals in the tech space have involved Microsoft Corporation (NASDAQ:MSFT) buying Minecraft for $2.5 billion and International Business Machines Corp. (NYSE:IBM) acquiring GlobalFoundries for $1.5 billion.
A major concern in the tech space has to do with the fact that a number of companies such as Twitter have consistently grown their base but with much disappointment on the bottom line performance. Facebook Inc. (NASDAQ:FB) and Google Inc. (NASDAQ:GOOGL), on the other hand, have been successful in keeping their shareholders impressed with a stable growing bottom line.
A monetization strategy is essential according to Nason especially on tech companies that have exposure to big audiences, if future growth is to be accelerated. Also, not to forget that these are most visited sites.
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