Digital companies that boomed during lockdowns hit by fears they cannot withstand a recession
Almost half a trillion dollars has been wiped from the valuation of once high-flying financial technology companies that took advantage of the boom in initial public offerings earlier in the pandemic.
However, concerns about rising interest rates, lack of profits and untested business models as the economy heads towards a potential recession have put them at the sharp end of this year’s sell-off.have fallen an average of more than 50 per cent since the start of the year, according to a Financial Times analysis, compared with a 29 per cent drop in the Nasdaq Composite. Their cumulative market capitalisation has fallen $156bn in 2022.
This was exacerbated by comparison to an exceptionally strong result in the same quarter last year, when the contrast with economic lockdowns in 2020 led to annual revenue growth of more than 1,000 per cent.
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