Warning :: WhatsApp and Tesla set the scene for soaring valuations

It is often a sign of a bubble when analysts and commentators rush to explain away each new upward step in valuations – and then come up with expansive arguments to justify why prices should be even higher.

Two events in the tech world in recent days seem to fit this description all too well.

Exhibit A was Facebook’s $19bn offer for WhatsApp. The most striking thing about the reception to this deal was how quickly Wall Street came to feel comfortable about the eye-popping price. There was universal amazement when the news broke, but most analysts quickly picked themselves up off the floor and rushed to explain why it made perfect sense.


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