![]() ![]() In one sign of the times, Apple was unseated last month by oil giant Saudi Aramco as the world’s most valuable company. ![]() The S&P 500’s Information Technology sector shed 19% since the beginning of the year, as of Wednesday, and the tech-heavy Nasdaq index has fallen more than 20%. Then came a seemingly perfect storm: inflationary pressures, the ongoing Russian invasion of Ukraine, rising interest rates and recession warnings have wreaked havoc on the stock market, and in the tech sector specifically. Access to easy money, thanks in part to the low interest rates meant to buoy the economy, only seemed to fuel even more buzzy, cash-burning ventures. The number of unicorns, or startups valued at $1 billion or more, topped 1000 globally in February, roughly doubling from before the pandemic. The tech sector, already dominant in our lives, only seemed to expand even more as the pandemic pushed people to work, shop and socialize through a screen. While nobody can predict the length or severity of the current market downturn – and most industry watchers don’t expect it to be as damaging as the 2000 tech crash – the new rhetoric marks a stark reversal in tone for a high-flying industry. “No one can predict how bad the economy will get, but things don’t look good,” tech startup accelerator Y Combinator warned in a letter to founders, before adding: “The safe move is to plan for the worst.”īill Gurley, a prominent venture capitalist, summed up the shifting mood in a tweet last month seemingly directed at tech startups who may be in denial: “The cost of capital has changed materially, and if you think things are like they were, then you are headed off a cliff like Thelma and Louise.” “The boom times of the last decade are unambiguously over,” venture capital firm Lightspeed, an early backer of Snapchat, said in a recent blog post. In recent weeks, investors and industry vets have been trying to raise alarms about the economic environment with a number of memos, tweets and other public statements. Susan Walsh/APĮlon Musk threatens to walk away from Twitter deal Tesla and SpaceX Chief Executive Officer Elon Musk speaks at the SATELLITE Conference and Exhibition in Washington, on March 9, 2020. ![]()
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