Private Market Optimism Meets Public Market Fear

Morning Markets: Let’s play “spot the chart that doesn’t match the others.”

Good morning and happy Friday. The public markets are falling apart again today. The tech-focused Nasdaq is off another two percent, and leading technology companies Amazon and Alphabet are taking stripes.

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But it’s not just the big boys that are struggling today. Box is off over $10 per share from its 52-week high, Dropbox is nearly back to its IPO price, and Snap is off over 10 percent this morning after reporting earnings. It’s a mess.

But it’s been the very opposite week on the private side. Yesterday on the podcast, we covered three new billion-dollar-plus funds that were announced this week. And as Crunchbase News charted the lot, I’m loving the delta between what the private markets are up to recently, and what public investors are enduring.

So, let’s check the private market first, and then compare the performance of cloud and SaaS stocks (the thing that many of these private investment vehicles are putting money into) right after.

Chart 1 (source):

Chart 2 (source):

Chart 3 (source):

And here’s the latest from the newly-reformed Bessemer Cloud Index (a basket of public cloud- and SaaS-focused stocks), going the other direction:

(Data via the Nasdaq)

The first three go up, and the last goes down. How long can we have this sort of divergence? I don’t know, but the answer cannot be “forever.”

Top Image Credit: Li-Anne Dias.