Social Stocks Tumble, Profitless IPOs -- Signs of a Bubble?

Updated
Social Stocks Tumble, Profitless IPOs -- Signs of a Bubble?

Could this be a bubble for fast-growing Internet tech stocks like Facebook , LinkedIn, and Twitter? There are several signs that it could. For one, an outsized sell-off on Monday for these stocks compared to the overall market suggested the market may be reevaluating the rosy expectations priced into these companies' lofty valuations. Second, a recent filing from cloud storage company Box to go public despite the fact it's losing more money than it's taking in and it doesn't expect to reach profit levels in the foreseeable future.

In the video below, Fool contributor Daniel Sparks takes a closer look at this potential tech bubble. Pointing to Facebook as an example, he acknowledges that some of these growth stocks do deserve premium valuations since they are growing their underlying businesses by leaps and bounds. But has the extent of valuations on these fast-growing Internet growth stocked reached dangerous territory?

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The article Social Stocks Tumble, Profitless IPOs -- Signs of a Bubble? originally appeared on Fool.com.

Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google, LinkedIn, and Twitter. The Motley Fool owns shares of Facebook, Google, and LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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