The surprised start of WeWork's boss, Peloton's catastrophic debut on Wall Street: the failure of several unicorns, companies worth over a billion dollars before arriving in financial markets, cooled the markets.
The internal crisis of WeWork is the last straw for investors who have been pouring money for technology start-ups for years.
For Garrett Black of PitchBook, the Joint Office specialist was "a typical example of a company where the omnipotent founder accumulated losses under the pretext of strong growth." The group crystallized distrust of market players, which has been growing since the beginning of the year.
WeWork's value has dropped by more than half since January, from over $ 47 billion to less than 20 billion.
Its co-founder, controversial Adam Neumann, had to resign on Tuesday under pressure from several board members. The group has finally decided to postpone its date of entry to the New York Stock Exchange indefinitely.
Other unicorns that jumped earlier this year have broken their horns.
Among the most publicized reserve platform for car drivers Lyft in March and its rival Uber in May had a catastrophic start, and shares fell by more than 40% and almost 30% from the first trading day.
"For some big names, such as Uber, a period of strong growth is a thing of the past in the years preceding the listing," explains Nate Thooft of Manulife Asset Management.
Uber, which is struggling with tougher competition and tougher regulations around the world, suffered losses of over $ 5 billion in the second quarter.
A long wait
Peloton, an exercise equipment specialist who landed on Wall Street on Thursday, fell by more than 11% after the first session on the New York market.
As for SmileDirectClub, which offers orthodontic braces at a reduced price, its operation has been falling for two weeks.
Able to finance growth for many years thanks to the massive contributions of private investors, several unicorns have not been as successful after the first steps on the stock market.
According to Thooft, these giants have waited too long before they let themselves go, and are unable to assure financial players that one day they will be profitable.
The disappointments of Uber and other unicorns led to the questioning of the financial value of strong growth companies, certainly, but not immediately capable of generating profits.
However, apart from some large symbolic names, the situation of unicorns that have recently entered the stock market is far from uniform.
According to the Renaissance Capital index, the results since the beginning of the year 80% of listed companies (+ 25.4%) are actually higher than the values of all values of the extended S & P 500 index (+ 20.9%).
This good performance is supported by several successful entries, such as Zoom Video Conferencing Specialist, whose title has risen by more than 110% in five months, or from the Beyond Meat vegan start-up, which has started over 500% since April.
Nevertheless, investors seem determined to be more careful about the guarantees given by technology start-ups that will soon enter Wall Street.
"These companies will have to be more rigorous in their spending, their balance sheet and growth rate will be analyzed," warns Garrett Black of PitchBook.
"Pure growth at very high costs will no doubt be more valued," he predicts.
The specter of the Internet bubble from the early 2000s, when technology-related values collapsed after inflating due to speculation, remains anchored in the memory of market players.
"This is not the same situation as 20 years ago, when there was no doubt that company values were disproportionate. In the case of unicorns, the values have risen too quickly, but the return to the cause is taking place, "says Jay Ritter, economics professor at the University of Florida.