2019 Tech IPOs: No Gain, Just Pain

The 2019 class of IPOs includes a number of so-called unicorns, including high-profile names like Uber, Lyft, Pinterest, Zoom and Slack. Together, the unprofitable IPOs have already raised the most cash of any year since at least 2000. Peloton’s Thursday debut on the Nasdaq is just the latest money-losing firm to go public—and also the latest to disappoint.

During the dot-com bubble, investors flocked to bet on the purported next big thing. A similar theme can be spotted in today’s IPO market, with some companies asking buyers to bet on unproven technology and untested revenue models. Goldman Sachs analysts are forecasting that less than a quarter of companies going public in 2019 will report positive net income this year — the lowest level since the tech bubble.

Investors are increasingly questioning the business model of growth at any cost. And this shift in sentiment is now evident in the price dynamics of these recent tech IPOs. All of the charts of these stocks are currently in a severe distribution mode. As these companies’ insiders continue to sell their stock and institutional investors continue to question viability of the business models, we can expect lower prices for most of these tech names in the weeks and months to come.

Uber Technologies Inc (UBER)

Lyft Inc (LYFT)

Pinterest (PINS)

Zoom Video Communications (ZM)

Slack Technologies (WORK)

Fastly Inc (FSLY)

Crowdstrike Holdings (CRWD)

PageDuty Inc (PD)

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