Donald Trump is worried about a tech bubble. In an interview with Reuters, the Republican frontrunner shared his concerns that high-priced tech stocks echo the inflated market of 2007.
Here’s Trump’s analysis:
You have a stock market that is very strange. Could be a little bit similar to, would you say it’s nine years ago now? I guess it’s sort of nine years ago. But you know, you look at some of these tech stocks that are so, so weak as a concept and a company and they’re selling for so much money. And I would have said can that ever happen again? I think that could happen again. I’m talking about companies that have never made any money, that have a bad concept and that are valued at billions of dollars. So here we go again.
Trump is hardly the first to raise the alarm over highly-valued tech companies. A number of experts, including Zillow CEO Spencer Rascoff, Microsoft co-founder Bill Gates and investor and entrepreneur Mark Cuban, have expressed concern about unicorns — a term used for private companies valued at over $1 billion. In fact, prominent venture capitalist Marc Andreessen mocked Trump on Twitter for arriving late to the party.
But fewer experts would endorse Trump’s claim that the supposed tech bubble is reminiscent of the mortgage crisis that occurred nine years ago. As Fortune’s Dan Primack notes, inflated valuations of tech stocks led to the bubble that burst in 2001. However, invoking the more recent crash is advantageous for Trump as much of his base was hit hard by the ramifications of that crisis.
“He seems to be suggesting that a 2016 tech stock crash could result in the same sort of economic contagion that occurred nine years ago (i.e., the Great Recession),” writes Primack. “Fairly bizarre given that the tech sector does not have the same type of systemic risk profile as does finance, not to mention the relatively small number of young tech companies that have gone public over the past few years.”