The plunge in so-called tech and social media stocks, especially of companies that are losing money and burning cash, has been spectacular. It started in February last year, with stock after stock getting taking down by 70%, 80%, and 90%, SPACs and recent IPOs in particular.
Startups can no longer rely on investors to endlessly feed their cash-burn machines. And for them, raising money has suddenly gotten difficult. Investors have gotten skittish. The founders of these startups are being warned by venture capital partners to get with it, cut expenses, and start aiming for positive cash flows, or else.
The tech boom is off. And what is next – what already began in February last year, one stock after another – is the tech bust.
https://wolfstreet.com/2022/06/02/tech-bust-takes-next-step-layoffs-hiring-freezes/