![]() The number of IPOs during 20 totaled more than previous five years combined. There was a wave of initial public offerings (IPOs) and raising of capital through special purpose acquisition companies (SPACs). The euphoria attracted many new investors and companies to the stock market. The tech-heavy Nasdaq Index increased by more than 150% from mid-March 2020 to mid-November 2021. ![]() The Dow Jones Industrial Average approximately doubled from mid-March 2020 to the end of 2021. This led not only to a reversal in stock markets, but a surpassing of all previous peaks. Flushed with liquidity, and with fewer avenues to spend discretionary funds due to closures of shopping, travel, and tourism, households piled money into equity markets. To deal with the panic, governments and central banks around the world responded with unprecedented fiscal and monetary policy, including interest rate cuts and infusion of liquidity in the market. ![]() Most stock market indices declined precipitously from February 2020 to mid-March 2020. It all started with heightened uncertainty in the business environment after formal declaration of the pandemic by the WHO. The pandemic unquestionably dictated the dynamics of stock markets in the last two years. ![]() So, what has changed, and what can managers of these companies do to bring back shareholder confidence? On the contrary, their products remain in demand, and they retain leadership positions in their fields. Strangely, none of these companies are going out of business soon. Some, like Peloton, have lost more than 90% of their recent stock price peaks, a category we call orphan stocks. They include Netflix, the streaming service PayPal, the online payment company Moderna, the Covid-19 vaccine maker Roku, the digital media player Peloton, the internet-connected stationary bicycle maker Uber and Lyft, the rideshare companies Gap, the apparel seller Zoom, the video communication company and DoorDash, the online food delivery platform. Numerous well-known companies have seen a decline of 60% or more in their stock prices from their recent peaks, all within a span of one year.
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