Let’s talk about the SaaS selloff

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if you bring bad news about up price of technology stocks on twitter, Very helpful people will send you multi-year charts that put recent declines in historical context. yes thanks; I didn’t know you could zoom out.


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The innate need to declare that selling tech stocks doesn’t matter is either a well-grounded argument or a poorly disguised fear. More on that in a moment. Regardless, the recent negative price movement of tech stocks — and software stocks in particular — matters.

Why? Because not only are we seeing software stocks flirting with bear-market territory in technical terms, but even fastest growing technology companies. This means that the public valuation multiplier – by far the leading indicator for private unicorns and young startups – is shrinking.

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Has the valuation shifted enough to slow the current venture capital bonanza? Maybe not. But we may be closer to that important point than you think.

falls down

NS Bessemer Cloud Index Trackable on public markets WisdomTree Cloud Computing Fund, which is essentially a trading version of the company set.

After hitting a 52-week high of $65.51 last month, the market cap of the basket of software companies fell to $53.00 as of this morning. That’s a decline of 19.1%, or 90 basis points, for a particular asset, or just under the 20% required for asset collection to reach technical bear-market territory.

We are close, in other words.



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