tv Maria Bartiromos Wall Street FOX Business December 29, 2018 9:00am-9:31am EST
at... and check out our website at... i'm bob massi. i'll see you next week. [ woman vocalizing ] and i will be here every step of the way for a new journey. have a wonderful new year. maria bartiromo wall street is right now #metoo t two. >> happy new year everybody the week that was in for the week ahead i am maria bartiromo we are so happy you are with us. and more suspected leaders bancroft and had to cough is with me this weekend and then i sit down with what we can expect from the investment front the year is gearing up to be a huge one for the ipl
and to wide it is happening for over 30 years to play a huge role in the venture capital field a firm focusing on the early digital media investment and expansion more than $1 billion under management right now good to see you. thank you for joining us. i love talking to you because you get a chance to see all the stories of america and the world when they are small companies and you can decide what you like and what you want to put your money. . >> right now it's the best i have seen in the last decade. going back to the boom times before the best of early 2000 but we are seeing enormous entrepreneurial enthusiasm but
there are incubators and start up labs in every city in the country sioux city iowa, every locality wants to encourage the young people to start businesses and not just with tax benefits because most young companies don't pay taxes because they are losing money but they are funded by people like myself who put equity but they just make it easier with the environment. >> some of those are very exciting they start small and become big companies like some of the others so let's go through of your investments and tell us what you see here and why they are growth stories how would you characterize those growth stories for a.
>> going on this reflection to say do you realize we started this company in the fact it is 50 or $100 million it started off as a very tiny company now there is a big loss ratio don't kid ourselves but may be approaching a billion-dollar company. i cannot remember that that they are probably the leading online merchandise not vintage necessarily but high-end luxury brands that someone has in their closet. >> i have a ton that i want to get rid of. >> what about a podcast? those are hot. >> in my opinion audio has been around forever i was
involved in the early stage almost 20 years ago now we see a groundswell of interest in the podcast because people don't have as much time to sit and read as they used to and they are listening everyplace whether walking down the street or writing in a train and originally fox international television, he has a great has american business wars, gladiator and the two hottest right now are dirty john adapted for television show which is part of the strategy. neither of your listeners should miss these. >> they are some of the best odd - - podcast out there.
>> typically speaking do you find out about these companies and then say let me contact them? how do they get you excited i'm not flattering myself but my hope is that we all have a following of some sort mine is probably longer than most because i've been here so long but they had people coming to see that we all go to conferences but then specifically at the highlight of the media industry. >> but insurance is very high. crypto is very high.
and looking at the picks and shovels those forces that are used to affect the marketplace and that is so secure. maria: cybersecurity? . >> no. crypto. just crypto but that we do have security companies one is flashpoint dealing with cybersecurity with those dark sources around the world trying to evade everybody for the first time last week i actually was hacked myself so now i have the experience of what it is like. for me it's everything you've
got and you never know how it got there. maria: a lot of new names coming in as well. i am expected to have a bigger bite in the small early-stage companies as well? . >> the acorns that we invested in one year ago that started out at ground zero, now skyrocketing dealing with the millennial generation in terms of using phantom money it is an interesting concept to go into starbucks if you have the acorn account if you buy something for $22.12 then 88 cents is put into your acorn account then that is invested in the stock market so the idea is to educate young people.
maria: ultimately how many go public how many are your exit strategy and ipo? . >> you ask me the questions i like to answer but in my previous life i built a pacs for a huge company those were a critical element. in 2006 the reality had said in the ipo was not in every company's future and we appropriately had the prescience to say let's not count on ipos that build companies that are appropriately financed at the right pricing and have a realistic expert expectation don't expect billion-dollar offerings and we were right. >> but there are ten billion-dollar companies that went public this year it was a great ipo year even though it was a tough market and next year's ipo calendar looks good stay with us when we come back i want to ask you what you think about the surge of the ipos with very familiar
maria: welcome back we continue my conversation with alan patricof obviously we had a tough end of year 2018 with the markets up and down again with these wild boosted that impact funding of small companies that impact your ability or desire to invest in the early-stage companies? . >> the private market venture
and equity is almost impervious to talk to an entrepreneur and say the market has been down 20 percent in the last two months he's out raising money for two months in the valuation was $50 million he doesn't want to hear what you have to say and as a result those markets hang up there and it takes a good amount of time before the reality sets in the have to be out there raising money then it will be reflected. it does not go down with the public markets go down so that hasn't happened. >> one of the reasons we see a big slate of ipo was all the money flashing around venture capital included these companies wanting to go public next year continue to rise and in 218191 companies it was up 32 percent from one year ago
global ipos 327 companies raised 127,000,002,018 a lot of health care and biotech look at these names going public huber and lift in pinterest air b&b what is your take why we see so many deals? . >> huber been around ten years i go back to what i said earlier when i started in 2006 the ipo market has slowed down lisa don't count on it i honestly believe i have to change my view based on what is happened i think it has finally opened up when you said 10191 companies went public but out of how many thousands of private deals were financed? they are sitting there in the private hands most transactions in the venture business are dead m&a that is realistic 98 percent of the companies in my portfolio
recently a company called the ship to be sold earlier this year for a very large price at target. we sold companies to google or facebook. maria: does the price today seem right to you are you getting the right price has valuations getting you to invest whatever it is millions of dollars at a low price? . >> there is a lot of money out there. . >> that there's a lot of competition. >> especially in the later stage in the earlier stage it is more disciplined but it goes back to what i said before you try to be as disciplined as you can. and the value that you ask for was last year.
it's not the current environment you have to get their mindset adjusted. in an entrepreneur who only sees one way, up, takes time to set in but it does at some point. but on the whole, valuations have been fair at the lower level but with 100 or 200 or $300 million at b+ it is big-money there are not enough opportunities at that level and huber are very high prices. >> they are pre- ipo rounds they are buying it with the idea this will go public something more than
120 billion and the market has to justify it by performance. >> are the even profitable? . >> not yet. >> i would expect some profit at their valuation. >> it is reported they are losing $1 billion per quarter but they are expanding into a new market but after they go ipo, what happens in those two or three quarters after? we have seen a lot of companies when snap went public the first or second quarter was a disappointment the stock collapsed and it's very hard to come back from that. maria: here we are at year-end so what is your expectation for venture capital market? . >> in the terms of the market when the president was elected and asked not to prognosticate
the market hates surprises and hates volatility we are getting volatility in the private i've been wrong until the last two months now the market is saying we don't like volatility and surprises. now go to the venture market so in terms of the venture market the overall stock market i'm very nervous as long as what we have what we see with the political and international scene we don't know if we have tariffs or taxes. >> and in europe. >> but if you talk to venture capitalist they have political beliefs but they are not at the front and they are funded with equity all they are concerned with is can i sell my product? can i raise money on the equity basis? i would say there is a
continuation of strong venture market particularly and i do think the ipo market is back and we will see a lot more out there with household names that have been waiting in the queue for a long time. >> and to buy some very familiar names thank you so much alan patricof joining as happy new year. come back soon. up next the year ahead with a leading money manager. stay with us. . >> 2018 was your volatility can we expect more of the same in 2019? . >> that will be the constant. >> john gives maria his take when wall street returns.
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managers and here is what he said for the year ahead. >> we will continue to see volatility with the market and the fed geopolitical volatility will be here that will be a constant but in terms of rates with people expect these huge surprises anywhere between where we are now or five or three and a half percent i think maybe the curve oil steep and a little more in terms of equities so to still believe in the growth story to see a shift of allocations of the more tax base and the financials that
start to creep up a little bit because of inflation. >> there should be at least three and 2019. . >> but how many rates? . >> the fed has to have a script and when we go off script we see the market lift up or down then we will anticipate what they will do but going forward the fed will be accommodative if it is extremely robust i think the
economy will get better but not as robust as they continue to take down liquidity and supply it is a balancing act if we do more than just one more rate hike. >> you have seen the market because if you have 10 percent in the three-year i'm sorry 10 percent in the two year you may say i can shift some money into fixed income but what kind of shifting are you seeing? with higher rates of one area or the idea that i could shift money into equities? . >> because of the volatility of the markets because we see
retail fluff and mom-and-pop and then the hedged equity those have seen a tremendous amount of increase because of the issues that customers are looking for. . >> i know that slowdown is coming with that outlook on the global economy. >> that isn't the case this is a different type of cycle and that could be two years.
investing professionals in terms of risk management in this environment that it will last a lot longer than it has in the past. yes. we are in a cycle so you have to be defensive. may be by 10 percent and then to last a lot longer so we don't want to leave upset on the tabl table. maria: don't go anywhere more wall street right after this. "wall street"
hope you will join us every morning. that does it for now from everyone hear we wish you a happy and prosperous 2019. i will see you next year. . >> hello. the clock is running down on 2018 and we find ourselves simultaneously looking backward and forward. back every year that was plenty of regret and forward but with a little and trepidation of what may come in 2019. above all a good year for the us economy it may prove it was the best year in more than a