Partner Louis Lehot was quoted in a Crunchbase News article, “The Market Minute: This Is How 2020’s Biggest Tech IPOs Have Fared On The Stock Market Roller Coaster,” about how some of the largest venture-backed IPOs of last year have performed so far this year.
Lehot said stocks typically trade down after an IPO if there are changes in management, or if a company misses financial forecasts and expectations.
“The high valuations are assuming growth numbers and tax rates on expected dividends, all of which are being adjusted on a constant basis,” he said. “I think growth expectations are being tempered by uncertainty in future tax rates, inflation and expected rises in interest rates. The political environment for tech is under the microscope, and the prospect of increased government regulation is a negative factor to the outlook for tech.”
Lehot also said the prominence of tech companies in the public markets make them a better gauge of the overall market. “When you look at the Fortune 100 20 years ago versus today, it used to be more heavily weighted toward industrial conglomerates… and you look at it today and it’s heavily weighted to tech. Tech has become the barometer of the financial markets.”