- The head of the largest asset manager said there was too much money being poured into private growth valuations, and now they're being "reset."
- Several cash-burning companies like Uber raised billions in private venture funding reaching massive valuations before stumbling in the public markets following their initial public offerings.
- WeWork another money-losing unicorn wasn't even able to successfully complete its IPO.
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BlackRock CEO Larry Fink says companies should go public sooner than they have been.
While speaking on CNBC Tuesday , Fink said the process of going public is a key component for building a strong organization because it gives investors transparency into the business.
"There was certainly way too much money flooding into the private growth valuations," Fink said on CNBC Tuesday . "Having a culture of only growth at all costs really produces bad outcomes in the long run."
One of those bad outcomes is companies staying private for longer as low interest rates lead to bloated valuations, Fink said.
But the public markets appear to be pushing back against money-losing companies that relied on private market funding to grow. Uber is trading below its IPO price and coworking giant WeWork called off its listing after intense of its business and governance structure.
"It's a wake up call for these private valuations," Fink said. "I think there is going to be a reset."
In light of the new dynamic, Fink said investors need to rethink their approach and focus more on companies' operations and paths to generating positive earnings.
"They need to be much more thoughtful about when companies can make profits," Fink said.