It was great while it lasted, but Silicon Valley is amid its worst sell-off since the 2008 stock market meltdown, following years of sky-high valuations.
Following a pandemic-fueled boom that drove tech stocks soaring. Several of those companies have had their worst six months as publicly traded companies. The exercise startup Peloton exemplifies this scary reality. Its stock has plummeted from a high of $163 in late 2020 to under $17 now.
The Wall Street Journal reported on Thursday that corporate leaders were looking to sell a minority stake to an outside investor.
“The most negative investor mood in Silicon Valley since the dot-com disaster,” said David Sacks, a venture financier, and former PayPal executive in San Francisco.
“The most negative investor attitude in Silicon Valley since the dot-com crash,” a former PayPal executive, said in a tweet this week, referring to the volatile early 2000s.
Because most early-stage tech companies aren’t profitable, they rely on venture capital infusions. To fund expenses while focusing on quick expansion. Which is considerably more challenging when customer demand decreases.
Companies that have made news in recent months for raising millions of dollars. Achieve billion-dollar “unicorn” valuations have announced layoffs. Cameo, a startup that produces celebrity video clips, and Robinhood, a stock market trading software, are among them.
Dan Primack, a highly read tech and finance journalist for Axios, stated this week, “A lot of this is about companies that never noted the VC gravy train would slow.”
Given the Covid-era boom-freshly public tech stocks face their test.
Some people are pausing to consider the current status of technology as a result of the big discount. Our economic environment has transformed. The ground on which the digital landscape stood is beginning to appear like an “abyss,” as tech executive and venture capitalist Dan Rose put it in a tweet.
Zach Coelius, another tech investor, pointed out that there has been an increase in tech investing in recent years. In which appears to be coming to an end.
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