Making Money in Technology
After the Bubble, page 23
The Opportunities Today
Now that we understand today’s environment, and have some framework for evaluating technology companies,
what are the opportunities?
This section focuses on what are essentially private, or investment banking strategies. Public Investment
Strategies and Tactics, later in this article, looks at public investment opportunities.
Public companies that sell for less than their cash on hand could be regarded as opportunities for both
public investors and investment banking activities. Stock screens reveal that there are hundreds of
publicly traded technology companies that are, in fact, trading for less than their cash liquidation
value. Most of these are Internet companies. Investors may wish to buy stock in these companies on the
hope that they close the gap.
Of course, the companies may just spend the cash without generating any long-term value, so it would be
wise to be careful if using this strategy.
Venture capitalists, or investment bankers, may see these comparative cash-rich Internet companies as
ripe for consolidation or roll-up plays.
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