By now you can be tired of stories about the bad news in the market. Unfortunately! More to come.
If the deluge of negative headlines feels like an accumulation, remember that in 2020 and 2021 Marketingwithanoy obsessively covered the various excesses of the technology, startup and venture capital markets; not to cover the party’s decline would be a grave mistake.
For a broader look at the slowdown and what falling prices for stocks and crypto assets mean for startups and unicorns in general, head here. From now on we will only talk about SaaS.
What’s going on with software companies?
Software companies, viewed by the public subset of the larger cohort, had a simply stellar run after COVID established itself on the global stage. Public software companies benefited from two things: First, it quickly became clear that software would continue to sell even in a recession. And second, there was little to no growth in other places to invest in, so the money piled up in tech concerns.
This was basically the pandemic trade. And as it became a defining period for the value of technology stocks, its unraveling has a similar effect, vice versa.
That reversal is not done. Not yet. Despite a massive sell-off since the November highs, today technology stocks are proving that there are new depths to probe. For example:
This particular ETF tracks the Bessemer Cloud Index, a list of public software companies that primarily deliver their business through the cloud. The basket of stocks peaked at $65.51 per share, which means as I write to you, it is down 54% and changing.