Adam Neumann and the WeWork boys pulled off possibly the most sensational collapses of all the tech unicorns. Here we dig into the numbers to add some perspective around the scale of value destruction, and compare against the mainstay tech titans and their relative gains over the past year.
Value Destruction + Creation
The sensational collapse of WeWork and the Softbank mafia is a well worn path at this point. We wanted to dig a level deeper and break down the numbers to add some perspective around the actual scale of value destruction from these companies.
The figures are pretty shocking. Adam Neumann worked his voodoo and made $77B in value disappear before our very eyes 🎩🐇🕳️✨
Just that value lost is the equivalent of 45x of Macy's (!!!)
Then we thought it interesting to look at the other side, some of the better performing tech titans and the relative scale of their recent gains and value creation.
The Value Destroyers
Many tech unicorns have been flying high at stratospheric valuations despite shaky fundamentals and business models. As some of these companies never made it public (and it's not clear if / when they will), we take a broad look at their most recent peak valuations compared to where they are as of May 2020.
- WeWork — though the company was initially being valued upwards of $120B by major investment banks in the lead up to its IPO, we went with a conservative $80B valuation. It was most recently valued at $2.9B, a whopping 96% decline.
- Airbnb — while it was slated for a blockbuster IPO valued at $42B, the company hasn't fared well in the face of the coronavirus pandemic and recently raised at almost half of that — $18B.
- Lyft — the company initially went public at over $24B, and is trading at a total market cap of about $8B as of mid-May (2020).
The Value Creators
On the other side, we have the tech titans — Apple, Microsoft, and Amazon. For the past year, these behemoths have produced some extraordinary gains, even in the midst of a global pandemic.
The growth here was calculated based on market cap changes between May 2019 and May 2020.
Fun fact — we even see Big Man Bezos putting up some big numbers. Not only is is $31B gain almost double the current valuation of Airbnb (just the amount he gained last year), but it amounts to about 525x JCPenney.
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