BIRMINGHAM – Bob Ackerman, a VC at Allegis Capital wrote what could be considered a self-serving piece on the security tech bubble published on VentureBeat. Of course an investor in security companies is going to stoke the flames of exuberance, especially in light of the ridiculous valuation of FireEye at IPO of $6 billion ($FEYE has a market cap of over $8 billion today.)
There is no question that we are in the middle of a tech bubble once again. While nothing will ever match the heady days of the dot com boom, with VCs throwing money at anyone with an idea for a website, there are signs of an overheated economy in tech. Dropbox taking $250 million from Blackstone at a $10 Billion valuation is only the latest indication.
Wall Street is the biggest culprit here, placing outsize valuations on companies that have yet to demonstrate a working business model. Twitter is trading at a market cap of $34 billion while bleeding money ? a $139 million loss in the nine months leading up to its October 2013 IPO. A sure sign of blind optimism was the 1,800% spike in shares of a bankrupt company called Tweeter because somehow investors thought it was Twitter.
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