Submitted by Fatherthinger t3_z619s2 in wallstreetbets
It seems like an eternity ago, but it's just been a year.
At this time in 2021, the Nasdaq Composite
had just peaked, doubling since the early days of the pandemic. Rivian's
blockbuster IPO was the latest in a record year for new issues. Hiring was booming and tech employees were frolicking in the high value of their stock options.
Twelve months later, the landscape is markedly different.
Not one of the 15 most valuable U.S. tech companies has generated positive returns in 2022. Microsoft
has shed roughly $700 billion in market cap. Meta's
market cap has contracted by over 70% from its highs, wiping out over $600 billion in value this year.
In total, investors have lost roughly $7.4 trillion, based on the 12-month drop in the Nasdaq.
Interest rate hikes have choked off access to easy capital, and soaring inflation has made all those companies promising future profit a lot less valuable today. Cloud stocks have cratered alongside crypto.
There's plenty of pain to go around. Companies across the industry are cutting costs, freezing new hires, and laying off staff. Employees who joined those hyped pre-IPO companies and took much of their compensation in the form of stock options are now deep underwater and can only hope for a future rebound.
IPOs this year slowed to a trickle after banner years in 2020 and 2021, when companies pushed through the pandemic and took advantage of an emerging world of remote work and play and an economy flush with government-backed funds. Private market darlings that raised billions in public offerings, swelling the coffers of investment banks and venture firms, saw their valuations marked down. And then down some more.
Rivian has fallen more than 80% from its peak after reaching a stratospheric market cap of over $150 billion. The Renaissance IPO ETF, a basket of newly listed U.S. companies, is down 57% over the past year.
VisualMod t1_ixyu2nd wrote
^^WSB ^^Stats ^^Discord ^^BanBets ^^VoteBot ^^FAQ ^^Leaderboard ^^- ^Keep_VM_Alive >TL;DR: The tech industry has lost $7.4 trillion in market value over the past year, as interest rate hikes and inflation have taken their toll. IPOs have slowed to a trickle and companies are cutting costs, freezing new hires, and laying off staff.