Nov 4, 2019

Unprofitable company IPOs are a big zero this year

The Uber banner hangs outside of the New York Stock Exchange in 2019. Photo: Spencer Platt/Getty Images

After being on pace to beat the overall market earlier this year, Reuters' April Joyner reports that a Reuters analysis finds "[u]nprofitable U.S. companies holding IPOs this year have had a median stock return of 0%."

Between the lines: This is likely because Beyond Meat is now profitable and its 228% stock increase this year is no longer counted among the returns of unprofitable companies.

  • Adding to that, companies like Lyft, Uber, Peloton and Slack have floundered on the public market.
  • Unprofitable IPOs have beaten the market about 47% of the time, according to Bloomberg.

On the other side: Apple shares have surged 62% year-to-date, Microsoft stock is up 41%, and the overall S&P tech sector index has risen 36% YTD.

Go deeper: Saudi Arabia approves IPO of oil giant Aramco

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Wall Street is no place for unicorns

Data: FactSet; Chart: Axios Visuals

Shares of Uber closed down almost 10% on Tuesday even though the company beat analysts' expectations on earnings and revenue.

Why it matters: It was the latest dollop of bad news for this year's crop of tech unicorns, which have largely fallen flat since going public, despite their mammoth private valuations.

Go deeperArrowNov 6, 2019

Wall Street loves a party

Illustration: Sarah Grillo/Axios

Investors put their recession umbrellas back in the closet last week and broke out their party hats, as all three major U.S. stock indexes hit fresh record highs. The market is bullish on the expected pause in President Trump's trade war with China and market participants have plenty of ammo to drive stocks higher.

What's happening: Investors are moving back into risky assets like stocks in a big way and selling out of traditionally safe ones.

Go deeperArrowNov 11, 2019

Investors more bullish on good earnings and less bearish on bad

Photo: Robert Nickelsberg/Getty Images

U.S. stock market investors are showing their bullish bias this earnings season, buying big on companies that beat expectations and going easy on selling companies that miss.

What's happening: "Shares of companies that topped forecasts rose an average of 2% in the two days after reporting results, beating the five-year average of 1%, according to data compiled by FactSet. Those that fell short have averaged a 2.1% pullback, below the half-decade average of 2.6%," WSJ's Michael Wursthorn reports.

Go deeperArrowNov 4, 2019