'Unicorns' that wowed investors face hard road on Wall Street

• October 02 2019
• http://www.jamaicaobserver.com/business-observer/-unicorns-that-wowed-investors-face-hard-road-on-wall-street_176089

NEW YORK, United States (AFP) — The so-called “unicorns” that lured big investments and took Silicon Valley by storm are facing a chillier environment as they turn to Wall Street for fresh capital.

The startups earned the unicorn moniker for quickly reaching valuations of more than a billion US dollars without hitting public markets, considered a rare feat until a few years ago.

But some of the most prominent unicorns have stumbled on Wall Street, with investors cautious about their profit potential as well as an uncertain economic outlook.

Uber, which was the biggest of the unicorns and had hoped for a valuation of US$100 billion, is worth around half that now, and its shares have skidded some 30 per cent since its initial public offering (IPO) in May.

Ride-share rival Lyft has fared even worse, with a 40 per cent drop since its IPO early this year.

WeWork parent We Company, another massive unicorn valued at some US$47 billion based on private funding rounds, shelved plans for its IPO this month and replaced its top executive Adam Neumann — after a series of missteps and governance questions surrounding the fast-growing office-sharing start-up that spooked investors.

Nathan Thooft, a portfolio manager at Manulife Asset Management, said some of the big unicorns may have waited too long to list on Wall Street.