TL;DR

Google’s $32 billion Wiz acquisition smells like another dot-com bubble in the making, fueled by FOMO and loose money. Everyone gets hurt when valuations detach from reality.

Story

Imagine a house of cards built on hype. That’s the story of certain Silicon Valley valuations these days. Google’s $32 billion acquisition of cybersecurity startup Wiz reeks of irrational exuberance, a term we haven’t heard much since the dot-com bubble burst.‣ Dot-com bubble: Late-90s frenzy where internet company valuations soared before crashing.

How did this happen? A mix of FOMO (fear of missing out) and loose monetary policy created an environment where billion-dollar valuations are thrown around like confetti. Last year, Wiz was offered $20 billion and said no. Now, they’ve snagged $12 billion more. This isn’t sound investing; it’s a casino.

Who gets hurt? Eventually, everyone. Google shareholders are watching their money vanish into thin air, much like those who bought into Enron before its spectacular collapse.‣ Enron: Energy giant that went bankrupt in 2001 due to accounting fraud. Retail investors chasing the hype might get burned too.

What’s the lesson? Be skeptical. Don’t fall for the hype. Remember history’s crashes. Due diligence is your only shield in this wild west of finance. This isn’t just about Google and Wiz; it’s about a systemic problem. When valuations lose touch with reality, the eventual correction can be brutal. Just like 2008.‣ 2008 financial crisis: Triggered by a housing bubble, leading to a global recession.

Advice

If an investment sounds too good to be true, it is. Don’t let FOMO override common sense.

Source

https://www.reddit.com/r/wallstreetbets/comments/1je3bod/goog_googl_buy_wiz_start_up_32_billion/