2019: A Fairytale Gone Bad for Unicorns

2019 hasn’t been kind to unicorns that left their natural habitat to survive in the cold, unwelcoming world of public markets. While stock markets have generally been doing well this year (the S&P 500 is up more than 20 percent so far), some of the largest, most anticipated IPOs of the year started with a bang only to wither under the public eye.

As the following chart illustrates, much-hyped unicorns such as Slack, Lyft and most prominently Uber, shed billions of dollars in market capitalization since making their stock market debut earlier this year, pointing towards a growing disconnect between private valuations and public trading levels.

While private investors buy into ideas and scalability, accepting what are often substantial losses as a side effect of blockbuster growth, public markets appear to be growing more concerned with the question of whether these companies will eventually find a way of making money instead of burning through it.