Ah, the startup mania. This market cycle has seen a flood of “unicorns” and other venture-backed companies capture investor attention like Pets.com and other startups did in prior bubble periods. The current drama surrounding WeWork’s efforts to go public is a perfect example of a company that at the core is a boring sub-leasing provider but has dressed itself up.
Give me a break.
These companies are largely not profitable, are burning cash badly and have been focused on razzle-dazzle more than anything. Now, these recent IPO stocks are filtering under the intense scrutiny that the public markets bring. Here are seven that are suffering.
IPO Stocks: Uber (UBER)
The biggest of the venture-backed companies to go public this cycle, Uber (NYSE:UBER) shares are languishing beneath their IPO price and look headed for further losses as California passes legislation, headed to the governor’s desk, that would force the company to classify its drivers as employees rather than independent contractors. The company will next report results on Nov. 7 after the close. Analysts are looking for a loss of 82 cents per share on revenues of $3.7 billion.
Lyft (NASDAQ:LYFT) shares are also suffering, down by roughly 50% from the company’s post-IPO high and crushing through its prior lows set in May. While the company beat arch rival Uber to IPO, both are locked in a seemingly endless cash burn cycle. The company will next report results on Nov. 7 after the close. Analysts are looking for a loss of $1.67 per share on revenues of $912 million.
Shares of Slack (NYSE:WORK), the provider of an instant messaging system for corporate settings (which is basically a huge time waster) are in a post-IPO free fall, down nearly 40% from the post-IPO high. Worries are surrounding the company, likely due to competitive pressure from Microsoft (NASDAQ:MSFT). The company will next report results Dec. 3 after the close. Analysts are looking for a loss of 8 cents per share on revenues of $155.7 million.
Shares of Spotify (NYSE:SPOT), the music service that had a unique direct listing IPO with lots of hype, is once again trading below its 200-day moving average and is down more than 30% from its all-time high as investors continue to worry about competitive pressures from the likes of Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL). The company will next report results on Oct. 31 before the bell. Analysts are looking for a loss of 32 cents per share on revenues of $1.9 billion.
Fiverr (NYSE:FVRR), another gig-economy icon, is watching in horror as its share price continues to drop after reaching a post-IPO high of more than $44. As the job market tightens and the freelance economy loses its luster, FVRR stock has fallen by more than 50%. The company will next report results on Nov. 11. Analysts are looking for a loss of 19 cents per share on revenues of $26.1 million.
CrowdStrike (NASDAQ:CRWD), a developer of cloud-based security systems that protects corporations and was founded by former McAfee employees, is seeing its share price drift down to its post-IPO lows. The company will next report results on Dec. 5 after the close. Analysts are looking for a loss of 12 cents per share on revenues of $118.9 million. Concerns center on the company’s lack of profitability and trying valuations.
Stitch Fix (SFIX)
The clothes-in-a-box purveyor Stitch Fix (NASDAQ:SFIX), which went public back in 2017, continues to languish badly as investors realize the company lacks pricing power and is under constant threat of attack from Amazon’s efforts in the fashion space. The company will next report results on Oct. 1 after the close. Analysts are looking for earnings of 4 cents per share on revenues of $432.4 million. Keep an eye on active client growth, which turned lower.
As of this writing, William Roth did not hold any of the aforementioned securities.
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