Dot-Com Bubble Echo: Even Encyclopedia Companies Such as the Britannica Group Are Going Public Now

Dot-Com Bubble Echo: Even Encyclopedia Companies Such as the Britannica Group Are Going Public Now

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

JP Morgan has just published a hard-hitting investment note, drawing parables between the dot-com bubble of the early 2000s and the unbridled enthusiasm that has become a hallmark of the current market. Against this backdrop, Britannica Group’s impending public market debut makes perfect sense. After all, who wouldn’t want to enjoy a lofty valuation in a market where almost everything floats?

Britannica Group Files a Draft Share Registration Statement With the SEC

The education-technology company Britannica Group, which happens to be the publisher of the Merriam-Webster dictionary and the famous Encyclopedia Britannica, has now announced that it has confidentially filed a “draft registration statement on Form S-1” with the SEC. This is typically a preliminary step on the long road to an IPO. The company has yet to announce the number of shares that it seeks to offer publicly and the corresponding offer price.

Bloomberg had reported back in September 2022 that Britannica Group was actively seeking a 2023 IPO at a valuation of around $1 billion. While the market’s oft-arising turmoil throughout 2023 likely played an important role in deterring Britannica Group from pursuing a public listing of its shares, the current year presents a much more sanguine landscape, with the Federal Reserve almost guaranteed to start cutting the benchmark interest rate, easing financial conditions (FCI) in the process.

Britannica Group’s public listing hammers home the elevated frothiness that has encapsulated almost the entirety of the market, echoing the peak mania phase of the dot-com bubble.

Are We in a Dot-Com Bubble Redux?

In what constitutes prescient timing, JP Morgan has just published an interesting investment note, concluding that the ongoing S&P 500 rally is “far more similar” to the dot-com bubble than what people normally think.

To support his claims, JP Morgan’s Chaudhry notes that the top 10 stocks in the MSCI USA index, which includes the “Magnificent 7” grouping of mega-cap stocks, carry a 29.3 percent weight, just shy of the 33.2 percent peak-weight back in June 2000 – the apex of the dot-com bubble.

At a time when the echoes of the dot-com bubble are again resonating across the halls of finance, Britannica Group has chosen to go public at a likely nosebleed valuation. Will the stock become a hallmark of the market’s excesses, or will the encyclopedia company again abandon its public flotation plans as the market’s reckoning arrives suddenly? Let us know your thoughts in the comments section below.

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