this post was submitted on 24 Jul 2023
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All of them are built on venture capital and borrowing money used to be "free" so investors were fine with borrowing with 0% interest and spending them on all the shiny tech projects. Now with interest rate being 5.25% they all of them all demanding return on their investment and companies that never in their lifetime were profitable are forced to come up with a way to make that money.
I’d love to read more about this, do you have a reference??
A good overview: https://www.cnbc.com/2015/12/17/silicon-valleys-cash-party-is-coming-to-an-end.html
The keyword is "the end of cheap money" if you want to Google some more.
What kind of effect would this have the share prices? I guess for Spotify a $1 isn’t super crazy for people to accept, you’d think it’d rise?
At the very least, profitable companies can maintain their valuation. Unlike, say, Twitter valuation which dropped to a third of what Musk pay for because it's losing even more money after the takeover.