Zerodha’s CEO Nithin Kamath, known for his educational comments related to stock markets and trading on social media platforms, on Saturday expressed fears of the sharp fall in stock prices of listed new-age technology companies across the globe. According to Kamath, only a small percentage of technology companies have been able to recover the losses.
In a series of tweets are Zerodha head advised modern technology companies to ‘prioritize lower long-term volatility versus maximum short-term gain’ while making a growth forecast.
Nithin Kamath said the net worth of core teams in most new-age companies is linked to ESOPs, adding that “The more a company tries to talk the price up in the short term, the higher the odds of large declines and volatility in the long term” .
Referring to a witty reference to Bollywood legend Amitabh Bachchan’s dialogue from the film Sarkar, ” Nazdiki fayda dekhne se pehle, door ka nuksaan sochna chahiye (Before enjoying the latest success, one should look for future gains) “, said Kamath,” When companies are mostly valued based on what they project, it may be counterintuitive to talk down rather than talk the price up . Lower stock price volatility may also be something companies should strive for, which is also good for long-term investors. “
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