Questions about how to value technology stocks have been around for as long as those stocks have been traded on exchanges.
In light of sky-high IPOs for tech companies like Twitter, Facebook and more recently, CandyCrush, New York Magazine’s Kevin Roose breaks down the opposing sides of the bubble argument.
Those who say we are in a bubble right now cite the recent IPOs of tech companies with little or no revenue as a prime piece of evidence. They also have time on their side, notes Roose, because even if the tech sector stays strong in the near-term, a correction or collapse will happen eventually.
On the other side, those who say the market isn’t experiencing a bubble say the tech sector is much stronger than it was in 1999, before the first collapse. Roose also notes that much of the investment is coming from within the tech community itself—meaning a collapse won’t have widespread implications for general investors.
For more arguments for and against, including a chart, click here.