Chamath predicts public tech will outperform late-stage private software in 2024
Chamath Palihapitiya · E160: 2024 Predictions! Markets, tech, politics, and more · Jan 6, 2024 · at 53:35
Chamath Palihapitiya, venture capitalist and co-host of All-In, outlines a pair trade strategy for 2024 favoring public software equities over late-stage private SaaS startups.
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“I'm going to take the public software index, tech stock index, and my short is going to be the private tech software companies, the late stage, mostly SaaS companies, and I think we've all talked about the reasons why, but I think that the terminal valuations are getting reset in the public markets. I don't think the growth rates are there in the private companies, and so you're going to have a Reset on valuation. In many cases that reset may just be that they stay at the same valuation three years later, even after doubling revenue or more. The problem is you will have taken another 30% dilution between now and then because of all the stock-based comp that these private companies give out. So Long the public tech cycle, short the private late stage tech cycle, expecting a valuation contraction in the latter.”
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