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Larry Cheng, Volition Capital managing partner, on the drop in consumer demand for the tech sector, and how it’s impacting revenue for major compani...
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-- soft Oracle and IBM.
Our next guest says the poor earnings quarter spells real trouble -- -- and NA joining -- now -- -- founder and managing partner abolition of capital.
Down from Boston I'm glad you're here.
Going to be here what -- this -- I mean we got apple down 20%.
Microsoft down 12% from its high does it mean that demand -- not there.
The entire enterprise IT supply chain has contracted consumer demand is down.
And it's turning everyone apple -- the PC computer manufacturers that semiconductors everyone supplies.
So in its testing because now what -- like entering recession often times you here at analysts say.
By consumer Staples and tech because it's unharmed you're saying not so much.
Well at the large cap and mid -- level -- the Amazon levels they are they've had a tough quarter I think it was the toughest quarter since 2002 as the 2008 crass.
But some of the younger tech companies are coming up and showing good growth in those ones are performing better OK so they show growth in the next step is generally to go public in but.
Again we've seen you know Zynga FaceBook get clobbered in the IPO market what happens well those are some some Bellwether big name -- had a very tough time but underneath that there are some smaller companies lesson on that have done well like a -- -- -- -- to -- -- software.
But they have performed pretty well in the aftermarket as a do you see.
It getting any better anywhere at 2010 levels me IPO market now.
You know it's very tepid out there if you're thinking about going public you're concerned that if you have one -- -- -- -- crashed.
And -- also looking forward and saying there's a lot of economic concern to you so -- it feels very risky at this -- you have regulation around the financial markets to be concerned about of course there's tax issues down the -- as well.
-- you have the rising this income taxes you have rising carried interest taxes you have -- corporate income taxes self.
All of that needs to be resolved this immunity is people know what environment they're working -- what happens -- -- the tech industry conceptually.
Everyone is hoping will pull us out of this families were in well the good news is entrepreneurs could care less of having in Washington and there are gonna start businesses and a lot of innovation going on.
So that's always going to be it and that'll be a staple do you what do you see then as the next big thing coming down -- everything mobile -- managing -- mobile.
Computing and enterprise everything related to the mobile supply chain is growing.
Everyone's accessing content to mobile phones and the PC in computing industry streaking.
But the mobile side is game is the industry's shrinking as well we see M a activity then instead we're gonna see a lot of -- -- -- activity because the large cap companies just candidate and so they're gonna have to fight.
That are building great products so that's good for these little guys -- -- -- a public they get bought up instead a -- big chunk of them well absolutely.
It's good staff lax and that he had gotten basically -- down.
