Prices of tech stocks soared during the COVID-19 global pandemic in part due to growth. Investors were paying 100x ARR multiples for some tech companies. However, that growth was not permanent and we are seeing tech stock prices revert to the mean.
Ecommerce penetration is one example. Online sales during the pandemic grew rapidly, but now have come back to a pre-pandemic rate. Many tech stocks benefited from this trend, but it turns out it wasn’t long lasting.
Read Reversion to the mean: the real long COVID by John Luttig.
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