BUFFALO, N.Y. (WIVB)- It was a rough start to the week for the market, with the Dow dropping more than 1,000 points.
The Dow has rebounded in the past couple days, closing Thursday up 369 points.
Associate Professor of Finance at UB’s School of Management, Cristian Tiu, told News 4 anytime the market experiences a sudden drop like this, smaller companies tend to put off their Initial Public Offerings, or IPOs.
Part of that, Tiu said, has to do with how larger tech companies respond.
Internet giants Facebook and Google both took hits this week: Facebook was down by 13 percent at one point. But it’s Chief, Tim Cook maintained the company was structurally sound.
Tiu agrees, and said the mystery of tech companies often feeds investor’s anxiety.
Because we know so little about what they’re doing, it’s hard to assess how successful they’ll be.
“You know that the utility company will be laying pipes, or cable, or wire. Whereas Google may be doing things that we understand very little about.,” Tiu told News 4.
He couldn’t pinpoint when, but believes start-ups won’t be on the bench for long.
“I don’t see any long-term trends. And I don’t think the fundamentals in the U.S. are terrible. Markets are volatile, and so when we disagree a lot on what the prices of things will be, then we see a lot of volatility. So the market drops one day and the market maybe goes up a lot the day afterwards,” he said.