Much has been said in this column about the inevitability of gravity when physics takes hold of markets best described as #RotationToReality, especially when valuations blast into outer space from time to time. No, I am not referring specifically to Space X or Elon Musk but the significant pullbacks in last year’s excesses such as GameStop meme stocks.
These fluffy tech stocks are best represented by Goldman Sachs’ Unprofitable Tech Index, which is down more than 70% from the peak last April, or the handful of Covid-fuelled consumer stocks like Peloton and Netflix. London-listed Deliveroo or US-listed Didi Global are also beating a hasty retreat too. Investors fled upon the realisation that much like the eyeballs of the dotcom era, the wobbly paths to profitability touted by bankers in the Wild West require a long hard look when the cost of capital starts going up.
Private equity exits slowing
