The Valley has experienced dizzying heights before of course. During the dot-com bubble, the market capitalization of just 64 companies peaked at around $2.4 trillion in September 2000. Once the dot-com bubble burst that same group of firms was worth just $630m 14 months later. The Valley is not immune to failure: fallen giants such as Sun Microsystems, which was worth nearly $200 billion at its peak, plus another 17 big tech firms have since been acquired or gone bust. As our briefing discusses, today may well be different: whereas in 2000 the trailing 12-month price-earnings ratio of Silicon Valley firms was 120, this time around it is just 20 thanks to stellar earnings from Apple and Google. And among those companies with extrordinary private-market valuations and measly revenues such as Uber, valued at $41 billion, and Airbnb, valued at $25.5 billion, the risk is concentrated within a small group of cash-rich venture capitalists.
