A FAVOURITE PASTIME in Silicon Valley, second only to inventing the next new thing, is bubble-spotting. Even industry insiders tend to get these things spectacularly wrong. “You’ll see some dead unicorns this year,” Bill Gurley, a noted venture capitalist, predicted in 2015, the year that incubation of these startups worth more than $1bn really got going.
The game has just become much easier: the sound of bubbles popping can be heard all over the place. Tech shares, initial public offerings (IPOs), blank-cheque companies (known as SPACs), startup valuations and even cryptocurrencies: all the assets that climbed to dizzying heights over the past few years are now coming down to earth. It is harder to say how loudly they will burst—and which might still reflate.
The decline of tech shares is the most spectacular. The NDXT, the index of the 100 largest tech firms on the Nasdaq exchange, is down by a third since its peak in early November. Firms in this index have lost a combined $2.8trn in market value.