A zillion 'tech' companies with massive scale operating losses (hey would K8s help with the scaling?!?) are about to find out what it's like when the financing spigots get turned off. Their employees will definitely take a large share of the hit.
In the public version of that you can already see how that's working out, as their stocks have routinely collapsed by 70-90% over the past year. Those companies will either have to sell themselves off for a fraction of what they were formerly worth, slash expenditures heavily (ie fire employees and cut expansion plans), or heavily dilute to raise some funds and pray the beating stops before they run out of money.
The crash that the pandemic should have brought forth (and nearly did), is here now. They temporarily papered over the disaster, and the bill has arrived regardless as it always does.
Some examples:
Snowflake: $715m operating loss on $1.2b in sales (lol) | Unity Software: $591m operating loss on $1.2b in sales | Roblox: $511m operating loss on $2b in sales | Palantir: $336m operating loss on $1.6b in sales | Robinhood: $2b operating loss on $1.6b in sales (lol) | Affirm: $632m operating loss on $1.2b in sales | SoFi: $411m pre-tax loss on $1.1b in sales | Twilio: $936m operating loss on $3b in sales | Uber: $2.7b op loss on $21b sales | Lyft: $865m op loss on $3.4b sales | UiPath: $500m op loss on $892m sales | Asana: $265m op loss on $378m in sales (lol) | Lemonade: $258m pre-tax loss on $149m sales (lol) | Fastly: $232m op loss on $371m in sales
And so on.
Some of these loss vs sales ratios very much resemble the excesses of the dotcom bubble. When the music stops (as it has), the losses become a lot more difficult to manage, the market smashes the stocks, customers pull back in recessionary environments, losses get even worse, companies have to slash and burn, and a lot of things go sideways in that hurricane.
Companies like Twilio have seen their stocks implode by 80% for good reason, they're bleeding very badly, their businesses are unsustainable as is. Lyft is a dead company walking, they have to sell themselves off if things don't promptly turn around in the economy and market (which appears unlikely); they're 75% below the IPO levels, it's a disaster for nearly all the shareholders (including employees) that have held.
How much is eg Asana really worth when their business consists of $265m in op losses vs $378m in sales? It's a joke. Discount it by 90-95% from the top and that's probably a reasonable start to the grinddown ($145 to $18 so far).
How about Fastly? They're dead. They probably have no choice other than to sell themselves off. For fiscal 2021 they added $64m in sales and $112m in operating losses to get that. Aggressively slam the brakes and their stronger competitors will just eat their business, don't slam the brakes and they're dead. $64 to $10 so far on the stock. They're dinner for Cloudflare, Amazon, IBM, someone.
These guys are all seriously fucked in one way or another. Those op losses vs sales are comical. Be sure to say hello to the brick wall you're about to slam into. They have several bad options to choose from to start dealing with their epic scale losses (and if they don't, the market will just smash their stocks that much more), including praying that the bad things just pretty please stop happening.
Adding blank lines between the companies would format it in a rough table.
But yeah, these are nuts and almost all these companies were dependent on "stock go up" and now the chickens have come home to roost. They'll all be acquired for pennies on the dollar by big players (though the really big ones like Uber might survive by massive purges).
Roblox and Robinhood are the most amusing, how can you screw up a money spigot so badly?
I dislike the extra spacing that HN requires for that style. And unfortunately I'm not aware of any way to do line to next line without the surplus spacing. I have always thought it would be a rather useful formatting option here.
In the public version of that you can already see how that's working out, as their stocks have routinely collapsed by 70-90% over the past year. Those companies will either have to sell themselves off for a fraction of what they were formerly worth, slash expenditures heavily (ie fire employees and cut expansion plans), or heavily dilute to raise some funds and pray the beating stops before they run out of money.
The crash that the pandemic should have brought forth (and nearly did), is here now. They temporarily papered over the disaster, and the bill has arrived regardless as it always does.
Some examples:
Snowflake: $715m operating loss on $1.2b in sales (lol) | Unity Software: $591m operating loss on $1.2b in sales | Roblox: $511m operating loss on $2b in sales | Palantir: $336m operating loss on $1.6b in sales | Robinhood: $2b operating loss on $1.6b in sales (lol) | Affirm: $632m operating loss on $1.2b in sales | SoFi: $411m pre-tax loss on $1.1b in sales | Twilio: $936m operating loss on $3b in sales | Uber: $2.7b op loss on $21b sales | Lyft: $865m op loss on $3.4b sales | UiPath: $500m op loss on $892m sales | Asana: $265m op loss on $378m in sales (lol) | Lemonade: $258m pre-tax loss on $149m sales (lol) | Fastly: $232m op loss on $371m in sales
And so on.
Some of these loss vs sales ratios very much resemble the excesses of the dotcom bubble. When the music stops (as it has), the losses become a lot more difficult to manage, the market smashes the stocks, customers pull back in recessionary environments, losses get even worse, companies have to slash and burn, and a lot of things go sideways in that hurricane.
Companies like Twilio have seen their stocks implode by 80% for good reason, they're bleeding very badly, their businesses are unsustainable as is. Lyft is a dead company walking, they have to sell themselves off if things don't promptly turn around in the economy and market (which appears unlikely); they're 75% below the IPO levels, it's a disaster for nearly all the shareholders (including employees) that have held.
How much is eg Asana really worth when their business consists of $265m in op losses vs $378m in sales? It's a joke. Discount it by 90-95% from the top and that's probably a reasonable start to the grinddown ($145 to $18 so far).
How about Fastly? They're dead. They probably have no choice other than to sell themselves off. For fiscal 2021 they added $64m in sales and $112m in operating losses to get that. Aggressively slam the brakes and their stronger competitors will just eat their business, don't slam the brakes and they're dead. $64 to $10 so far on the stock. They're dinner for Cloudflare, Amazon, IBM, someone.
These guys are all seriously fucked in one way or another. Those op losses vs sales are comical. Be sure to say hello to the brick wall you're about to slam into. They have several bad options to choose from to start dealing with their epic scale losses (and if they don't, the market will just smash their stocks that much more), including praying that the bad things just pretty please stop happening.