One way or another, a lot of tech companies and the execs who run them are eager to sell you their stock right now.
First, we have a deluge of private tech companies that -- perhaps encouraged by the receptions given to the likes of Lemonade (LMND) , Agora (API) and most recently BigCommerce (BIGC) -- have filed for IPOs over the last few months. Along with the sheer number of companies that have filed, what's notable here is how many different types of companies want to go public.
The list includes well-known tech unicorns such as Palantir Technologies, DoorDash and (as of Tuesday) Airbnb. And it also includes lesser-known names such as prescription drug shopping website GoodRx, live-streaming service provider fuboTV and insurance software firm Duck Creek Technologies.
In addition, a slew of Chinese tech companies have (in spite of ongoing geopolitical tensions) decided it's a good time to conduct or at least explore a U.S. IPO. This list includes financial asset marketplace Lufax, car marketplace Car House Holding and electric car makers Xpeng Motors and Li Auto.
Companies that are already publicly-traded, and which aren't in any pressing need of additional capital, have also in many cases been eager to sell stock -- even though corporate debt markets are quite friendly in the wake of the Fed's various actions. Tech firms announcing stock or convertible debt offerings just over the last week include Wayfair (W) , Shutterstock (SSTK) , CDW (CDW) , Avalara (AVLR) , Wix (WIX) , Overstock (OSTK) and Upland Software (UPLD) .
Then there's the major uptick we've seen in insider stock sales as the Nasdaq has surged past 10,000. A Raymond James study of insider transactions across sectors in June found that tech had the highest skew towards insider sales relative to buys (financial services, for those wondering, had the highest skew towards buys).
One could also bring up the $25 billion-plus that has been raised this year (per website SPACInsider) via IPOs for special-purpose acquisition companies (SPACs) that are effectively given a blank check to purchase assets. Though SPACs haven't only been spending the funds they've raised on tech companies, a decent number of them have been.
When trying to make sense out of all this activity, it might be worth applying Occam's Razor: Companies and execs are eager to sell stock to public investors -- as opposed to doing things such as remaining private, raising debt or making insider buys -- simply because they consider this to be a good time to sell. Because they consider current equity prices to be inflated or to at least skew the risk/reward in favor of selling as opposed to buying or standing pat.
In addition, having so much stock get sold within the tech sector through various means isn't a positive for the supply-demand balance. Having hot money chase a greater quantity of financial assets could help put some downward pressure on the prices of the existing assets that it has been chasing.