Class blog 1 – Cameron Patrick
When the three guys who were responsible for the development of FOMOSonar came to class to present, it really made me realize how fast technology can change. Coming from a strong investment background, I cannot help but think how you can make money investing on changes in the market place. Investing in tech companies is like the Major League Baseball Draft. Each year scouts go out and try to find the best players for their team, only to replace those players the very next year and find even better ones. Technology changes so fast, that it only takes one new chip or innovation to completely shift the landscape. When investing in technology companies, you always want to be aware of the innovations that are occurring in your field. The stock market is ruthless and it will punish companies who are not able to hold on to their niche.
The FOMOSonar application is similar to Groupon, in the sense that it allows users to see local promotions in the areas that they are in. Users must determine if their value add is better and if it is, they will permanently shift to the new application. FOMOSonar is an app that should be on investor’s radar because if they ever decide to go public one day, there could be some serious investment opportunities on the long and short side. When you short a company, you are betting that the shares will fall and if they fall below the price where you shorted them at, you will reap a profit. Recent IPO’s such as Groupon and Zynga have seen their shares tumble 30-40% since their shares started to publically trade. I think it is important to understand that just because a company is good, doesn’t mean that it is a good stock.
I wish FOMOSonar the best of luck and I hope they succeed beyond their wildest dreams. Small businesses generally fail and I really hope that this is not the case. If FOMOSonar gains some serious traction, they could grow big enough to IPO one day. If this does occur, investors must determine if their value add and niche is still dominating. Only time will tell if that is the case.
Video Tutorial on Short Selling: