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Are The Unicorns Running For The Door?

Minus some/a lot of government dysfunction, 2018 has been a good year economically for the Bay Area. OK, most of 2018 has been a good year. Obviously, this last 2-3 months has been very turbulent. If you are a wealth management company, I am sure you have been fielding a lot of phone calls from worried clients. As mentioned in previous commentary, the Bay Area is often insulated from many of the national economic troubles because of our strong foundation in technology companies. The November numbers for hiring in the Bay Area are especially gladdening as hiring was not only strong in the tech sector, but across the board including: construction, warehousing, hotel, restaurant, arts and entertainment. This has been the best it’s been for a single month for the last two years. It’s so strong that many forecasters expect 2019 to be another strong year. Execuforce agrees, as we currently have a lot of momentum. However, with some of the biggest “unicorns” expected to go public next year, we have our concerns.

Airbnb, Uber, Lyft, Slack, Palantir, and Pinterest are among the big ticket companies expected to go public in 2019. Two years ago, closer to the start of our come back, an increase in IPOs would have been a positive indicator for me. However, with politics as they are, looming trade wars, and an uncertain stock market, I wonder if these unicorns are getting out while the getting is good. When it comes to the economy, many believe what goes up most inevitably come down. The question would be, “how far down?” Normally, IPOs help drive innovation in the Bay Area, however I am bit hesitant in my excitement when there is so much economic uncertainty occurring not just in the U.S., but throughout the world. Possibly, these companies see the writing on the wall, and feel it is time to cash out.

We aren’t a bunch of downers here at Execuforce. 2018 has indeed been a great year and we are cautiously optimistic for 2019. Quite possibly, all of these companies going public may use the generated money to innovate and do amazing things. However, although the U.S. economy has been doing exceptional, all of the factors affecting it both positively and negatively have only increased.

As always, Execuforce wishes you all a very Happy New Year! Whatever happens, we will work it out together as we always do.

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