All of them are built on venture capital and borrowing money used to be "free" so investors were fine with borrowing with 0% interest and spending them on all the shiny tech projects. Now with interest rate being 5.25% they all of them all demanding return on their investment and companies that never in their lifetime were profitable are forced to come up with a way to make that money.

[–] neardeaf@lemm.ee 9 points 1 year ago (1 children)

I’d love to read more about this, do you have a reference??

[–] redcalcium@lemmy.institute 14 points 1 year ago* (last edited 1 year ago) (1 children)

A good overview: https://fortune.com/2022/12/28/investing-outlook-2023-fed-interest-rates-stocks-inflation-cheap-money-era/amp/

It's been the talk since quite some time ago and it's finally here.

The keyword is "the end of cheap money" if you want to Google some more.

[–] Kingkhan@lemmy.world 2 points 1 year ago (1 children)

What kind of effect would this have the share prices? I guess for Spotify a $1 isn’t super crazy for people to accept, you’d think it’d rise?

[–] redcalcium@lemmy.institute 3 points 1 year ago

At the very least, profitable companies can maintain their valuation. Unlike, say, Twitter valuation which dropped to a third of what Musk pay for because it's losing even more money after the takeover.