Elon Musk is no longer the richest man in the world. Tech stocks are no longer the favorite stocks of the market (at least not par excellence). IPOs seem to have disappeared. And cryptocurrencies can’t get out of the black hole they’ve sunk into.
“Although in theory there is a lot of money in the market, The geopolitical situation is prompting people to be more cautiousHas no debt and is done with operations Equity (investment capital) and with a view to refinancing them, And yet the possibilities are still sky-high multiples.“, says José Antonio Sánchez-Duffos, business partner for Latham & Watkins in Spain and Portugal.
“It’s the perfect storm for us to be relatively unemployed,” he says in an interview. Business Insider Spain Member of the Technology Committee who led the legal team behind the sale of Glovo to Delivery Hero.
These are the players who have suffered the most from the stock market crash in 2022.
1. Elon Musk
The troubled purchase of Twitter isn’t all that tech mogul Elon Musk, who wants to populate Mars, has suffered this year. The Tesla CEO faces a net loss of around $130,000 million (over 122,000 million euros) in 2022.
this is the result of perforation Nearly 70% of his company’s shares declined of electric vehicles.
“Tesla is having very bad times and these bad times will continue. It is one of those companies that is expected to have very, very powerful growth rates and it will be very difficult to confirm that,” he said in an interview with commented. Business Insider Spain Eduardo Bolinches, economic analyst.
The current economic situation and a drop in demand for its vehicles have prompted the company to extend the shutdown of its factory in China till January.
2. Technical Activities
While the Nasdaq has fallen just 3% since the Twitter purchase, compared to Tesla’s 50% decline over the same period, the benchmark tech index has had one of the worst years in its history. In 2022, Tech shares drop 35%,
Meta did so at 66%, Apple and Amazon at 26% and 49% respectively. and Netflix, up more than 50%.
“In 2021, they took advantage of the stock market pull, the post-pandemic surge, and some conditions that looked like they were going to change forever. For example, new technologies. will continue and technology companies went up a lot”, says Miguel Useda, investment director at Velzia Management.
main The problem these companies are facing now is their valuation. And interest rate hikes, analysts believe.
“Los Sectors that have suffered the most from the hike in interest rates They are those where future benefits, but closer in time, were less but with larger growth. They were technology companies,” Unai Ansejo, co-CEO and founder of Indexa Capital, confirms in an interview with Business Insider Spain,
The exact storm that Sanchez-Duffos cited earlier this year also changed the course of special purpose acquisition companies known as SPACs. special purpose acquisition company,
In 2022, SPACs fell 86% during the yearAccording to SPAC Analytics. and IPO (initial public offering on stock exchange) of SPACs, up 70% in 2022.
“Clearly The market for SPACs and K has cooled down sponsors, Maybe they are looking for alternative markets, but the sentiment in the market is that sponsors They are going to take some time off (leaving the SPAC they are in or requesting an extension to have a better operation), but with the intention of returning,” defends the lawyer.
Yes actually, SPACs will never be as we know them again,
“The structure of SPACs to be raised in future will not be the same as the present one. As soon as you shut down an operation, you will not be able to exit as well as an incentive to invest.”
“Now he was raising any SPAC. What is going to happen, probably in the third quarter of 2023, is Only with SPAC teams track record (history of operations) and the teams that, perhaps, form SPACs with clear intentions and with some understanding. It is not a dead market, it is a market that is about to improve,” he clarified.
Uceda of Welzia Management believes the same The amount of emissions this year will be higher than in 2022, But not with the happiness of past years.
“No company is going public to generate cash to increase valuations,” he defends.
5. Sam Bankman-Fried and the Fall of Cryptocurrencies
Total cryptocurrency market capitalization is less than 1 trillion dollar, as it reaches its maximum of $3 trillion in late 2021, according to data consulted by business Insider, Celsius and Three Arrows Capital filed for bankruptcy.
Again came the liquidity crisis and leaks of FTX movements, the transactions Sam Bankman—of Fried’s cryptocurrency—is already facing federal fraud charges.
The sudden bankruptcy of FTX casts even more doubt on the cryptocurrency market, which continues to slide. experts we spoke to business Insider He says that traditional companies will be more skeptical about deals related to cryptocurrencies.
diego ferragudThe CEO and founder of Crypto, also believes that there is still time for crypto values to bottom out, according to his statement in an interview with . Business Insider Spain,
,Cryptocurrency will continue to decline, However, not as much as in the case of bitcoin, which has gone from 60,000 to 15,000,” he says.
“Within the cycle, we are in the fear and despair part, the lowest part of the market. I calculate that, After stabilization, we will start seeing another increase in 2024,