In a program on Bloomberg, Cully Davis, co-head of growth equity capital markets at Credit Suisse, talked about Alibaba Group Holding Ltd (NYSE:BABA)’s IPO in the US and its effects on the tech market. Davis thinks that the there was an overall pause in the tech markets before the Alibaba Group Holding Ltd (NYSE:BABA)’s IPO. Companies wanted to wait and see the tentative shift of market after Alibaba Group Holding Ltd (NYSE:BABA)’s IPO in the US. This pause started in the summer and still effecting the market, according to Davis.
“There is definitely a little bit of a pause in the technology activity in the third quarter, really resulting from Alibaba Group Holding Ltd (NYSE:BABA) […],” said Davis.
Davis said that startups and companies in the contemporary markets have a lot of capital and they can access and apply for funding and investments. Apparently, this is a good sign, but when companies get their hands on capital, they tend to spend more. This trend can be devastating in the long terms as the markets are driven by many volatile attributes today. He said that public funds are entering the domain of private companies and the market is no more driven by only venture capitalists. He said that Alibaba Group Holding Ltd (NYSE:BABA)’s IPO has set a trend of fixating big decisions around IPO valuations. This, Davis thinks, is unprecedented in the US markets.
According to Davis, investors are always interested in those companies that have high growth rate. He said that technology markets have a great and bright future because they are not defined by a limited set of options. Mobile payments, enterprise software, networking and new devices are some of the paramount sectors which have a great potential to grow in the coming days, thinks Davis.