When and how is the digital industry shift/storm/tsunami going to reach global capital markets? So far companies like Facebook, Google and Apple already provide shining examples of new businesses that mostly rely on new web-based technologies. These businesses have created substantial shareholder value and firmly put “digital” investments on the radar of any professional investor.
Significant amount of funds are already allocated towards these businesses – but this is only one side of a not so shiny coin. If there are new sources of capital allocation there should be other sectors where funds are withdrawn.
Here in Germany more and more companies are going bankrupt – established merchants like Praktiker (Bloomberg News) are going belly up. In my opinion this is not just a continued chain of bankruptcies that are linked to failed business strategies/bad management but clearly a seismic shift in terms of consumer behavior. Traditional business models can no longer keep up with online models that have proven higher agility. Through this agility they are much better at attracting customers while being highly price competitive due to lack of “legacy” structures. This asks for a rapid change in capital allocation and provides opportunities for some interesting trading strategies. So it becomes interesting to predict who is going to be next and to see if it is possible to short stocks like crazy 😉