Another Bubble Extravagance Hitting Its Peak

Sunday, February 28, 2016
Posted in category Economics

One outcome of a bubble era is irrational profligacy in corporate spending because business executives and managers can’t unravel the false market signals that lead to malinvestments and careless management of company assets and cash flow during a bubble period. Silicon Valley startups have been throwing around cash to carelessly buy luxury items as signing bonuses and to hold extravagant corporate events.

The message of more caution is not lost on all start-ups. Some are cutting back on expenses, albeit just a little. Jeff Selzer, the manager of Palo Alto Bicycles, a specialty bike store, said he was seeing fewer start-ups build custom $10,000 bicycles as signing bonuses for new managers.

We certainly haven’t seen this before.

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