The end of the tech boom? The end, therefore, of Ireland's boom? Social media business model is showing signs of fatigue - at the very least.
Housing is displaying some cracks
Meta (FaceBook) latest results have combined with other tech company warnings to produce a near trillion dollar meltdown in share prices. That’s partly because these companies were priced to grow forever at rates that were never feasible. They are called growth stocks after all. Make no mistake, these companies are still fabulously profitable. But if profits are not going to grow much more, or at least at rates we have become accustomed to (or worse), then Ireland’s boom is threatened. Particularly its boom in corporation tax revenues. Like the companies that generate those taxes, they couldn’t be expected to grow forever.
It’s not all companies, not even all tech companies. The Other Hand even bought Microsoft this week (a share, anyway). Investors need to discriminate between sustainable and sick business models. We think social media is unwell.
The world economy - consumers in particular - are showing signs of cracking in the face of inflation and other headwinds. Ireland is not immune. The UK is particularly vulnerable. Cracks are also visible in housing.
All this and more is discussed in our latest podcast.
Links:
On Acast
Almost sounds like the big tech companies are becoming increasingly like the big utility companies of old. Not so much rocket science, and much more ESB 😉
Guys can I ask why ye think the ECB is making a mistake raising interest too aggressively. If anything they kept them too low for too long. Even the most committed Keynesian accepts in a boom your raise taxes and cut spending. All I ever hear is now is not the time to do it. Before it was covid as the reason. Can I ask when is the time to raise rates?all the data points the economy has strong numbers.