Did the Second Dot-Com Bubble Just Burst?

Zero Hedge thinks so. The site just published a piece on the matter, along with a graph that shows the declining performance of new Internet IPOs.

“Of all the dot com 2.0 IPO to hit the market in the past 3 months, the average return is now down 20%, but that has not prevented an underwriting syndicate comprised of the TBTFs to make billions in underwriting fees,” Zero Hedge's Tyler Durden writes. “Luckily, the fervor that previously had gripped some of the more volatile precious metals, and since spilled over into new public issues, has popped.”

Consequently, Durden believes that incremental cash will now be “nearly impossible” to get.

And so the tech bubble argument continues. I've already outlined my thoughts on the matter, but there is one point worth reiterating.

Unlike the last bubble, which included a cornucopia of low-quality corporations, the new “bubble” – if you can call it that – includes a multitude of genuinely powerful firms that aren't going anywhere. Facebook, Twitter, and Groupon are just a few of the growing enterprises in the tech field. They could continue to flourish without an IPO, but should they choose to go public, it won't be the stock market that does them in. If, for example, Facebook were to lose another million users, that would be the company's downfall. Its demise wouldn't have anything to do with an initial public offering.

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