Uber, Pinterest, Zoom, Slack IPOs have San Francisco bracing for new tech boom
ERShares CEO Joel Shulman says the U.S. market is "hot" and gives his take on Pinterest.
The City by the Bay is bracing for a brand new tech boom triggered by a rebound of initial public offerings, partly driven by the rising stock market and rebound in the U.S. economy.
Levi’s and Lyft kicked off the IPO renassiance last month and now investors will soon be clamoring for Uber, AirBnb, Slack, Pinterest, Zoom and PostMates, big name startups with plans to raise hundreds of billions of dollars in their initial public offerings.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LEVI | LEVI STRAUSS & CO. | 16.57 | -0.19 | -1.13% |
| LYFT | LYFT INC. | 18.12 | +0.20 | +1.12% |
| PINS | PINTEREST INC. | 28.24 | -1.13 | -3.85% |
| ZM | ZOOM VIDEO COMMUNICATIONS INC. | 81.14 | -1.49 | -1.80% |
While Main Street investors get a fresh crack at new stocks to invest in, the deals also mean big pay days for employees who can cash in their stock options. By one estimate, the Bay Area could see up to 10,000 newly minted millioniares with money to spend on everything from luxury cars to lavish parties to real estate.
In San Francisco, already one of the most expensive cities in the world, the median home prices averaging $1.36 million, per Zillow, nearly double the average five years earlier.
Even so, some experts say that could soon look like a bargain in a city already struggling with a shortage of affordable housing.
"Over the next five years, I expect rent prices and home prices to appreciate at least 50 percent. One hundred percent is also plausible. And we're looking at a much more expensive city," says Deniz Kahramaner, real estate agent and founder of Data Bay Area.
This tech boom comes just a few years after the explosive growth of companies like Apple, Google and Facebook saw the gentrification of middle-class neighborhoods where long time tenants were suddenly priced out.
Charter buses that shuttled tech workers to and from Silicon Valley became a symbol of income equality. The City's chronic homeless problem and worsening traffic continues to vex government officials and residents. Consumer psychologist and author Kit Yarrow worries this new wave of wealth could create more tension.
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"I think we're gonna be seeing a lot of transition in the Bay Area, and probably a lot of resentment from people who didn't become overnight millionaires," says Yarrow.
But don't expect a buying binge immediately. Analysts say employees will have to wait out an initial lock up period, which restricts certain shareholders from cashing out too quickly, before they can cash in, so it could be at least a year before the impact of all these IPO payouts makes it from Wall Street to Market Street.