Yes it is. They backed a couple hilariously bad bets in a big, public way, and people like feeling smarter than rich strangers.
I would be curious, though, if there are other funds with similar scope and track records to Vision 1 that have just managed to skate under public scrutiny thus far.
> They backed a couple hilariously bad bets in a big, public way, and people like feeling smarter than rich strangers.
The two things are related. The public visions for these companies went beyond the standard startup platitudes about 'making the world a better place'. Regular people can see through that, because they don't live in an SV bubble where playing along with this sort of hubris is encouraged.
I don't think anyone thinks they're smarter than Softbank or Adam Neumann. They may just be enjoying the schadenfreude of this hubris come crashing back to earth once reality entered the picture.
It's not just a couple, and the way they did it is notable. They over-capitalized companies in key sectors like logistics, transportation, robotics, etc.
They pumped in hundreds of millions of dollars per round of funding even when the company might not have needed it (with the threat being "we'll heavily fund your competition if you don't take our deal). Their thesis was to monopolize a few sectors with sheer money and scale.
We're now seeing the effects of that strategy play out.
Don't forget that part of the negativity towards SoftBank comes from the source of most of their funds. At least the majority of their funds in the previous fund they raised.
All the ibuyer companies won't make it. Nationwide downturn in house prices and all the inventory these companies are holding are underwater. Zillow and Redfin are more than likely done. Zillow maybe holding 60,000 homes.
We never learn our lesson. GE was taken out by their financial division and high risk bets.
Zillow just sold a house in my neighborhood they had for almost a year at a $40k loss. It sold for about $75k less than when Zillow first tried to sell it.
The house itself is very odd and the outside materials don't match the rest of our neighborhood. It was renovated poorly and looks weird but Zillow bought it anyway.
“ Nationwide downturn in house prices” there’s nothing certain about that happening. Look at 2001. It may.. but all the free money being thrown will prop up prices some. Plus supply in the tank because people aren’t moving.
Lenders have already tightened up loan requirements which will decrease the demand part of the equation. It is the same thing that happened during the great recession. People may want to buy, but have no ability to do so. There's also the high unemployment rate and foreign investors liquidating inventory for capital because their country is also going through a downturn. All the ibuyers have stopped purchasing. If the stock market drops, 10% of buyers who use their 401k or IRA for their downpayment will probably dry up.
I don't see any situation where the housing market doesn't drop.
That said I believe the drop after 2008 should have been more significant. The massive amount of cash the government pumps into markets, it allows massive amounts of dark/shadow inventory that would cause further price drops if the market was transparent.
>Plus supply in the tank because people aren’t moving.
One of the complicated things about housing prices is that people do (mostly) need to live somewhere. Yes, there are homeless and yes people move back in with family etc. But, for the most part, the people getting laid off from, say, Bay Area tech jobs aren't immediately picking up and moving to some cheap city in the Midwest. Especially if they already own a house.
not only that but in highly competitive markets like the bay area, they may even hold out for buyers that use one of their own agents (and try not to sell to others). That way, they can make 3% commission on both the buying and selling side. It's a huge conflict of interest to their own client which technically isn't legal ~ they're supposed to consider all offers.
That’s mainly due to irresponsible monetary policy by the Fed. Imagine if the benchmark rate was 10%. A lot of the indebted would default/go bankrupt, but it would also incentivize companies to save and behave fiscally responsible.
As a consumer of Zillow and Redfin, I like their website. But, as a house buyer, I really dislike the fact that they always try to push their buyers Agents on you.
I feel like the amount of subliminal shitposting within an article is increasing as this goes on. What did that sentence about Florida have to do with anything? They are on a statewide lockdown.
TechCrunch is likely seeing declining ad revenues, meaning they need to post more trolly/blight/clickbait-y content to compensate to get more page views.
The fact that they deemed live pro wrestling an "essential business" is one thing that shows they might not be taking their statewide "lockdown" seriously.
We get a lot of grief down here in Florida, but what people don't get is that we are the way we are because the worst people from every other state retire here.
Can I ask a stupid question?' I kind of did a Rip Van Winkle and stopped reading Techcrunch for eight years. Back in the day I would email Alexia and she would take the story tip and write a cool article. Is TC 100% pay to play nowadays? I know so many people who submit press releases to them and they get auto-deleted. What gives?
I don’t know much about their readership numbers but I stopped reading them as well roughly 8 or so years ago. Maybe their readership broadened and even increased?
It's still good but it seems more like focusing on publicly traded companies. I'm not bashing them, I just don't see the "weird Internet" or "weird startup" content anymore. But then Quibi ships and you see nothing but Quibi for a few days. It's just not how I remembered TC.
Companies with marginal business models are going to get slaughtered in the next year. Carvana, Opendoor are probably the most well known of these companies.
Opendoor's business model was super questionable from the get-go: who's going to sell you their home for less than market value? How can you then do something to turn that around and profit without basically turning the company into a giant high-risk flipping enterprise?
Yes, but stocks are ripping higher on much worse jobless claims, housing starts, and Philly Fed numbers than expected, 113 unexplained cases of reinfection in South Korea, and the PPP fund being completely tapped out with three weeks to go in Congress' recess.
The market is fully convinced that everything is fixed.
That's not what the "market thinks" at all. The stock market is much more complicated than you assume it is. But if you want a really simple explication: 4t$ more in circulation chasing the same amount assets, interest rates make it non viable to hold bonds, and you don't want to buy bonds anyways if you expect a more inflationary economy. If there's expectations of inflation, you go for stocks and if there's inflation AND 0 interest rate, you RUN for stocks.
You can also think of it this way, retail investors can afford staying in cash indefinitely but make up a tiny portion of the capital. Big money NEEDS to either buy bonds or park their capital in any yielding asset. Right now treasuries offer safety but negative real yields for probably a long time. But a pension fund still needs to generate returns to pay it's beneficiaries. So what's the best and cheapest option right now, by far? Stocks. You have to keep in mind that prices are relative so if stocks are relatively cheaper than bonds you buy stocks. Now add 4t$ to that and you get a stock market that stays strong even if everyone in the market knows the huge economic risks we are facing right now.
Never assume that a whole entire sector that has so much incentives to price in all the available data would just ignore something because they feel like it. I don't get how people really believe that.
alot of people are saying it's just a dead cat bounce. REalVision presented that in most of the past drops of this magnitude, you typically see this type of rebound before it goes lower back to retest the recent lows.
I'm surprised this got to the front page with a few upvotes. These days it's either the news about the Corona virus or that one of the companies that SoftBank has invested in is announcing a layoff. These days every other company is announcing layoffs or salary cuts.
