Is the tech bubble bursting? The truth could lie in ping-pong

It’s the question everyone in Silicon Valley is asking — are we in a tech bubble, and when is it going to burst?

The Wall Street Journal suggests the answer lies in ping-pong.

The table tennis game — as ubiquitous among Silicon Valley tech startups as free food and T-shirt attire — can be used to measure the market’s health, according to The Journal’s report.

Sales are down among local ping-pong table vendors, and many are blaming a downturn in the tech economy. Billiard Wholesale in San Jose reports sales to companies fell 50 percent in the first quarter of this year, compared to the quarter before. David Vannatta, sales team leader at Sports Authority in San Francisco, told The Journal that his ping-pong table sales have fallen since Christmas.

And big tech companies that have struggled with layoffs, shrinking revenue and lackluster quarterly reports, such as Yahoo, Intel and Twitter, have stopped buying tables, vendors told The Journal.

The signs of a downturn are everywhere. Startups are undergoing layoffs, venture capitalists are pulling back on funding, and tech companies are too scared to go public.

In the first quarter of this year, eight U.S. companies raised $700 million in initial public offerings — a low the market hasn’t seen since the 2008 financial crisis, according to Renaissance Capital’s quarterly review of the U.S. stock market. Those numbers are dismal in comparison to the previous quarter, when 32 companies raised $6.8 billion. It’s a low the market hasn’t seen since the 2008 financial crisis, according to the report.

VC investment was down 30 percent from a recent spending high in the second quarter of 2015, according to the MoneyTree Reportby PricewaterhouseCoopers and the NVCA, based on data from Thomson Reuters.

So maybe to keep tabs on this volatile market, we just need to follow the bouncing ball. The bouncing ping-pong ball, that is.

Photo: Facebook employees take a ping pong break in 2014, at the company’s campus in Menlo Park, Calif. (Karl Mondon/Bay Area News Group)

 

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