Marc Andreessen at the Fortune Global Forum event.
Photograph by Stuart Isett/Fortune Global Forum
By Dan Primack
November 6, 2015

Payments company Square this morning revealed plans to price its IPO shares lower than where it had last raised money in the private markets, leading some to suggest that the company’s new value is illustrative of the tech bubble beginning to deflate. But venture capitalist Marc Andreessen views it differently.

In a series of tweets, Andreessen suggested that a real tech bubble can only exist if irrational exuberance has extended to the public equity markets – where most tech company value lies – and that Square’s relatively modest pricing expectations are evidence that it has not:

Spot the logical flaw in the claim that Square pricing IPO below last-round private valuation indicates existence of a tech bubble… 😀

— Marc Andreessen (@pmarca) November 6, 2015


Hint hint: Consider what the claim would be if Square were pricing IPO at 3x the last private round valuation!

— Marc Andreessen (@pmarca) November 6, 2015


Indeed, Square’s existing backers seem to have gotten a bit ahead of Wall Street in terms of price – though its fully-diluted valuation (at the mid-point of its proposed IPO range) would still be higher than its last private rounds.

However, Square still is expected to have an initial market cap of around $4 billion, despite having no profits and slowed growth. So while the public markets might not be pumping up a bubble like Andreessen’s private market peers, that doesn’t mean that they’re completely devoid of hot air.


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