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Land of the Unicorns

By Advisor Perspectives
Financial Services

There is a herd of unicorns prancing through Wall Street and the bulk of money is chasing them. A “unicorn” refers to a startup, usually venture-backed, that achieves a private valuation in excess of $1 billion whether they are profitable or not when they become public. What once seemed impossible is commonplace today. The two king unicorns are Uber, the $1.8 billion money losing taxi company, which could go public next month with a value of $100 billion, and Lyft, who lost $911 million in 2018 and had a valuation of $20 billion upon their offering.

The estimate for upcoming offerings in 2019 is $80 billion which is double the yearly average since 1999. Historically peaks in IPOs have indicated the top of the stock market and a precursor to a recession. Both 1999 and 2007 were very strong year for IPOs leading to nasty bear markets thereafter.

Read more at Advisor Perspectives.

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