VIRUS OUTBREAK DELIVERS TECH DARLINGS A HARSH REALITY CHECK

Techlife News|April 11, 2020

VIRUS OUTBREAK DELIVERS TECH DARLINGS A HARSH REALITY CHECK
Just as the coronavirus outbreak has boxed in society, it’s also squeezed high-flying tech companies reliant on people’s freedom to move around and get together.
Since the beginning of March, for instance, Uber shares have lost a quarter of their value. Rival Lyft is down 28 percent. Over the same period, the S&P 500 has fallen just 10 percent, even with wild swings along the way. The picture is even less clear for other, still-private “unicorn” companies once valued at more than $1 billion, such as Airbnb and WeWork.

“What market pressure will mean for all companies is survival of the fittest,” said Allen Adamson, co-founder of the marketing firm Metaforce and a business professor at New York University. “If you are going into this storm in a bad shape, it’s not going to be pretty.”

Just few weeks ago, Airbnb was poised to cash in on a soaring stock market with its highly anticipated public offering. But with the market now reeling and few people looking to anywhere but home, Airbnb is reportedly racking up millions of dollars in losses while fending offa backlash from hosts who rely on its service to survive.

Hosts were furious when the company told guests they could cancel their stays without penalties. Last week, Airbnb agreed to pay hosts $250 million to make up for some of the money lost to cancellations.

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April 11, 2020