Chowdhry: Twilio And Nutanix Are Marching In The 'Junk IPO Parade'
Cypress Semiconductor Corporation (NASDAQ: CY), a technology company that supplies the automotive, industrial and networking platforms, announced earlier this week it will eliminate 500 jobs across the world.
The company said its reduction amounts to 7 percent of its global workforce as part of a cost-cutting plan.
According to Trip Chowdhry of Global Equities Research, Cypress' layoff announcement has broader implications. The analyst suggested that the company doesn't have a "durable and sustainable business."
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A Barrage Of 'Junk' IPOs
Meanwhile, several recent IPOs can be put in the same category as Cypress as operating a company that is not durable and sustainable. The companies include Nutanix Inc (NASDAQ: NTNX), Twilio Inc (NYSE: TWLO) and Apptio Inc (NASDAQ: APTI); all three stocks could "collapse by more than 70 percent" within the next eight to 12 months, if not sooner.
In fact, Chowdhry suggested that Nutanix, Twilio and Apptio will "be joining the previous junk IPO's" including Zynga Inc (NASDAQ: ZNGA), Groupon Inc (NASDAQ: GRPN), Fitbit Inc (NYSE: FIT), GoPro Inc (NASDAQ: GPRO), Twitter Inc (NYSE: TWTR) and Box Inc (NYSE: BOX).
Finally, Chowdhry expects around 369,000 technology sector workers to lose their job throughout 2016. These individuals unfortunately have "obsolete skills" and "will remain unemployable" and merely join the tens of thousands of technology professionals who have already permanently dropped out of the employment pool.
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