-
Sure. I'm saying that huge amounts of new private equity money (50%+) ends up going to Facebook and Google for advertising to grow the business through customer acquisition. But acquisition costs have been steadily rising for years as consumers mature and become desensitised to advertising. This creates an unsustainable situation for businesses and this means they need to raise larger and more frequently, and from my limited experience the bottom has properly fallen out of that market.
deleted-
I'm saying that huge amounts of new private equity money (50%+) ends up going to Facebook and Google for advertising to grow the business through customer acquisition.
Ah, right. Yes I can see what you mean.
It's a new breed of "zombie" company that instead of being kept afloat by low interest rates, are being kept going by huge injections of private capital when they in all likelihood have no route to profit.
It's a pretty unjust situation for a trad business when a PE funded monster start up arrives in your area and buys your customers by offering services at significantly below cost, in order to make you go bust, and then take advantage of a monopolistic situation.
But it's an allegedly free market, so all it's all fine...
Whilst I agree that a big bust up in PE will have significant consequences for the wider economy, I won't be able to avoid a bit of schadenfreude if it does happen.
ChasnotRobert
could you explain this a bit? interested in what you are getting at.
I agree that many investments seem to be based on the "bigger fool" theory, and the likes of Vision Fund have kept this moving along nicely, so far at least.