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Bailey McCann, Opalesque New York: Coronavirus is hitting nearly every sector of the market, but so far, the tech sector has been able to weather recent volatility. New data from the Stifel Global Technology Group suggests tech is better positioned than most sectors to handle the crisis but companies are likely to be impacted for at least the next six months. The survey includes responses from nearly 300 tech executives, entrepreneurs, private equity investors, and venture capitalists.
The majority of PE/VC respondents (62%) expect to see a business impact from COVID19 on their portfolio companies for more than six months, while nearly half of tech executives/entrepreneurs (46%) are also planning for disruption lasting at least half a year. Most respondents expect a U-shaped recovery, the overall width of the U remains unknown.
"Interestingly, the majority of our PE/VC respondents are only forecasting a modest reduction in prices for acquisitions and sales of technology assets and expect to continue with add-on acquisitions for portfolio companies," said Patrick Seely, Co-Head of the Stifel Global Technology Group. "Deal activity may slow, but it clearly won't stop."
According to survey data, 54% of respondents expect valuations to come down 5%- 20%, and 43% of respondents saying they expect valuations to come down more than 20%. Similarly, sale prices for portfolio companies are also expected to decrease, with 73% expecting valuations to come down a modest ...................... To view our full article Click here
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