The Slaughter of the Tech Unicorns - Daily Beast

After nearly two triumphant decades marked by an unprecedented accumulation of both wealth and power, our tech oligarchy seems to be running out of luck. Newly issued IPOs—Uber, Lyft and Slack—are losing values at breathtaking rates, while others in the on-desk circle, such as the once widely anticipated We, are headed back to the bench.

Silicon Valley’s new form of capitalism had seemed to promise insiders enormous gains even as companies lost money. Now the unicorns are crashing on the rocks of reality. “Hot” companies such as Peloton Interactive, Uber and Lyft may have grown enormously but they did so largely on the backs also of enormous losses; enthusiasm for newer IPOs has dimmed as investors discover, once again, that results finally matter more than hype.

People at venture capital firms, notably Japan’s SoftBank, and its $100 billion investment fund, won’t be missing meals, but likely won’t be adding zeros to their net worth either. Analysts generally see a downturn and some predict another searing crash, with the potential for “massive losses” like those associated with the busting of the dotcom bubble in 2000. There are certainly parallels: 81 percent of companies with IPOs in 2000 failed to turn a profit in 2001. Out of 160 firms that went public in 2017, more than 60 percent failed to turn a profit in 2018.