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Expand chart
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.

What's happening: After years of ravenous buying, Wall Street turned bearish on new unprofitable companies and even investors' newfound risk appetite hasn't been enough to reverse the trend.

By the numbers: An S&P index tracking U.S. companies worth over $1 billion that have IPO’d or spun off within the last five years, has underperformed the S&P 500 by nearly 12% over the last 6 months.

  • With Beyond Meat no longer among their ranks, those unprofitable U.S. companies have had a median stock return of 0% this year, Reuters reported Monday.

The big picture: Before this year, unprofitable had been exactly what investors wanted.

  • In 2018, 81% of companies to IPO had negative 12-month trailing earnings on the day they went public, according to an analysis from University of Florida professor Jay Ritter.
  • This year, 80% of companies that had IPOs reported negative earnings in the 12 months ahead of their launch, analysis from ratings agency S&P Global shows.
  • "Had not WeWork and Endeavor pulled their IPOs in recent weeks, the figure would have been on track for the highest reading ever," S&P's director of index investment strategy Chris Bennett wrote in October.

The bottom line: Bennett notes there have been growing "signs of trouble in tech paradise, with Uber and Lyft’s post-IPO struggles and WeWork’s 'failure to launch' highlighting the potential challenge of transferring private valuations onto the public stage."

Go deeper: The fall of unicorns

Editor's note: This story has been corrected to reference the S&P U.S. IPO & Spinoff Index (not the S&P U.S. Spinoff Index).

Go deeper

Tech scrambles to derail inauguration threats

Illustration: Sarah Grillo/Axios

Tech companies are sharing more information with law enforcement in a frantic effort to prevent violence around the inauguration, after the government was caught flat-footed by the Capitol siege.

Between the lines: Tech knows it will be held accountable for any further violence that turns out to have been planned online if it doesn't act to stop it.

Dave Lawler, author of World
4 hours ago - World

Uganda's election: Museveni declared winner, Wine claims fraud

Wine rejected the official results of the election. Photo: Sumy Sadruni/AFP via Getty

Yoweri Museveni was declared the winner of a sixth presidential term on Saturday, with official results giving him 59% to 35% for Bobi Wine, the singer-turned-opposition leader.

Why it matters: This announcement was predictable, as the election was neither free nor fair and Museveni had no intention of surrendering power after 35 years. But Wine — who posed a strong challenged to Museveni, particularly in urban areas, and was beaten and arrested during the campaign — has said he will present evidence of fraud. The big question is whether he will mobilize mass resistance in the streets.

Off the Rails

Episode 1: A premeditated lie lit the fire

Photo illustration: Sarah Grillo/Axios. Photo: Chip Somodevilla/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 1: Trump’s refusal to believe the election results was premeditated. He had heard about the “red mirage” — the likelihood that early vote counts would tip more Republican than the final tallies — and he decided to exploit it.

"Jared, you call the Murdochs! Jason, you call Sammon and Hemmer!”