Billionaire Investor Mark Cuban is warning that the current tech bubble, largely fueled by worthless apps that will never make a profit, is far worse than the Dot-com bubble back in 2000. “Small individual investors are putting their money into apps with no chance of getting their money back,” the Dallas Mavericks owner and “Shark Tank” investor told CNBC’s “Closing Bell.”
Cuban isn’t alone in his assessment.
Back in 2013, I warned about this new tech bubble and how companies like Twitter and Snapchat could cause another stock market crash. In my opinion, all of the financial indicators suggest that 2015 could be a rough year.
People are literally pouring money into companies that have never released a profitable product, and will likely never do so. Many of these so-called tech companies have no revenue, no actual value, and no hope of ever becoming profitable; it seems the only thing these companies are good at is suckering foolish investors into buying their stocks.
Start-ups like Snapchat are fueling the bubble
Last year Snapchat was valued at 10 billion dollars by investors. This year they are seeking a new round of funding of around 500 million dollars – giving Snapchat at $19 billion valuation. Stop and think about that for a moment; people are pouring money into a company that has no profits, and admits they are only now trying to figure out a way to monetize the app. Despite having no way to make money, the company is expected to go public sometime this year.
Just like the Dot-com bubble, the real estate bubble, and the 2008 crash of the stock market, this new tech bubble is going cause major economic problems. I suggest you take notice and make preparations for some rough economic times ahead.