Bubble Watch #11
Fresh on the heels of our concerns about China and low volatility, we bring to you another sign that the world might just be going a little mad….
Some years ago I wrote about the 1999 listing of NetJ.com in which its prospectus noted: “netJ.com conducts no substantial activity of any description” and the company “has no plans to conduct any substantial business activity of any description in the foreseeable future.”
After the IPO price of 50 cents, the shares of NetJ.com listed at $2.00 and had rallied to $8.88 by the peak of the internet bubble. The firm subsequently went out of “business”, was delisted and true to label; never conducted any business activity of any description!
Sound even remotely familiar to what is happening now?
Well, here we are, 15 years later and another company has emerged to try and profit from doing as little as possible…
The trending news site ThinkProgress has just uncovered an app that has raised $1 million from investors. And what does the app do? The only thing it does is allow you to send the word ‘Yo’ to your friends.
It did however take eight hours to build…
According to ThinkProgress; “To many, it seems like a joke. But its inventor, Or Arbel, is totally serious.
Arbel, who built the app three months ago, has quit his job and moved halfway around the world — from his native Israel to San Francisco — to work on Yo full time. He’s opening an office, hiring staff and seeking “strategic partners.”
So is Arbel right? Is Yo, which he calls “context-based communications,” the future of messaging? Or is investor interest in Yo an unmistakable sign that we are in the midst of another internet bubble?
According to Arbel, once you start using Yo “the way it affects your life is profound.” ”
Or profoundly stupid?
There have been many independent testimonials to vouch for the life changing impact of the app and we note one of our favourites here:
“Since downloading Yo, all my relationships have improved and I’ve regrown most of my hair.”
It seems the Yo app also simplifies lives. According to its founder,
“It takes 11 taps to send a Yo using WhatsApp but with the Yo app, it only takes two taps.”
Genius.
Perhaps Facebook will acquire Yo to compliment its $19b acquisition of WhatsApp.
As we have written here previously, with Amazon trading at 1454 times trailing earnings, there’s a general consensus that we’re in a tech bubble again.
One observation the LA Times makes is that when the last tech bubble burst, in 2000, and the Nasdaq Index lost nearly 80 percent of its value 200,000 people in Silicon Valley lost their jobs.
In the first quarter of this year “venture capitalists invested $9.5 billion in 951 U.S. companies,” hoping to profit from other people’s hope that every app can and will be monetized.
According to Arbel, who is working on developing an API (yes, I do know what an API is because I have been involved in developing them too) that will allow other brands to partner with a Yo; “When the Gap has a sale, for example, it would send you a Yo. When your friend’s plane lands, Delta will send you a Yo.”
Again genius…
Or idiocy. You decide.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Yo
:
Yo!
andrew rowan
:
History repeats and thise that say “this time is different” are bound to repeat the mistakes of the past. A great read is the book “devil take the hindmost a history of financial market speculation” written many years ago but no less relevant today.
G H
:
I think Randy Jackson should sue for copyright! Mind you he does say it twice maybe it doesn’t count!!
Andrew Legget
:
Yo Roger, sorry couldn’t help myself.
I am trying to think of how the “yo” app would have any type of real future other than a passing fad.
I get the last paragraph about partnering with other ocmpanies and can also see that there is value potentially in selling data on users “yo” behaviour if it can be linked to particular demographics (say coke wants to advertise to 18-25 year olds and find that this demographic seems to “yo” a lot from say the local beach) but it isn’t anything that isn’t already being done and probably better by companies like facebook, twitter, 4square etc. The issue as well is the above is just me thinking blue sky and not even linked to whether this is actually the plan or can be done for yo.
Items like this can encourage us a bit however as the more we see potential irrational behaviour the more likely some opportunities might manifest itself in the future.
Wayne A
:
Ridiculous, and yet it did make me chuckle. So perhaps it has some value after all.
Peter Abela
:
Yo
Dennis Bergmans
:
Please pop. Please pop. Please pop. Please pop.
It’s been a while since I got to go bargain shopping.
Roger Montgomery
:
Indeed!!!