When Was Peak-Insanity of the Unicorn-Startup Bubble That’s Now Imploding?

WeWork was just late to the defenestration party.

Everyone – including infamously me – has been trying to pinpoint the exact moment when the magnificent startup-unicorn-bubble broke, and I mean not just broke but imploded spectacularly. All of the biggest upcoming IPOs were cancelled. All the biggest ones that got out the IPO window this year crashed and burned. And the $47-billion WeWork unicorn is now awaiting dismemberment or a bailout from Softbank after its IPO hopes were annihilated by a catastrophic event, called “market conditions,” when some sort of rationality starts to reinsert itself in tiny baby steps into the market.

WeWork is the current favorite for pinpointing when, who, and what blew up the IPO market that is so crucial for the startup-unicorn scheme to function and to come to its completion. Former Nasdaq CEO Robert Greifeld explained in an article published on CNBC this morning:

WeWork’s aborted IPO may come to mark the end of the current “unicorn” bubble the way the scuttled merger between Yahoo and eBay signaled the start of the dotcom crash in 2000.

Having become CEO of Nasdaq in 2003, I saw up close the damage caused by the growth-over-profits philosophy in that earlier era, and WeWork’s spectacular fall – from the year’s most anticipated IPO to a company with a speculative-level credit rating that may run out of funds within a year – rings many bells.

He lays out some of the similarities of the period leading up to the dotcom crash and the period leading up to now, in sections titled aptly:

  • “Funding feeding frenzy.”
  • “Messianic founders.”
  • “Governance is for saps
  • “The ho-hum in sexy packaging” – what I called, in WeWork’s case, making “little ones out of big ones.”
  • “Unsustainable business mode.”

Yes, I’m totally with you, Mr. Greifeld. You nailed it. It’s obvious now to everyone. Everyone can see today what we’ve lambasted for years. And now everyone is trying to figure out the moment it started to implode.

But I don’t think WeWork did it. It crapped out on us because the bubble was already imploding, and WeWork had simply failed to get out the IPO window in time while it was still open earlier this year.

Lyft got out in time and crushed stock market jockeys.

I suspected something was off when Lyft’s shares, in first-day trading on March 29, plunged 10% in four hours after their initial “pop” to $88.66 a share. The first highly anticipated mega-IPO in 2019 had crapped out. Today, shares are trading at $38.70, down 56% from the IPO “pop” (stock data via YCharts):

Uber got out in time and crushed stock market jockeys.

At its last round of funding before the IPO, Uber was “valued” at $76 billion. There were hopes of a $120 billion IPO. Appetite waned as Lyft shares got crushed and as Uber disclosed that it had lost $10 billion in the past three years. The “rumored” IPO price started coming down. Uber went public on May 10 at $45 a share, with a valuation of $82 billion.

After the lowered IPO price, Uber shares fell out of the gate. Then dip buyers stepped in, and shares meandered higher – until they plunged. Shares are currently trading at $29.61, down 37% from their peak, and down 34% from the IPO price of $45. Market cap is a still inexplicably humongous $50 billion (stock data via YCharts):

Many other mega-IPOs got out and crushed stock market jockeys.

There were many other overhyped cash-burn machines with gigantic valuations that crashed and burned sometime after their IPO, before the WeWork IPO hopes collapsed. I went through some of them in my podcast, in reverse chronology:

  • Peloton: -22% from its IPO price on September 26
  • Dynatrace: -30% from its peak
  • Slack Technologies: -39% from its first-day “pop”
  • Crowdstrike: -35% from its peak in August
  • Chewy: -37% from its peak three days after the IPO in June
  • Pinterest: -37% from its peak in August
  • Zoom Video: -31% from its peak in June
  • PagerDuty: -57% from its peak in June.

On June 10, I infamously pinned peak-insanity of the startup-unicorn bubble on the precise hour: 9:59 AM Eastern Time on that Monday.

This was the moment when the shares of Beyond Meat had skyrocketed 34% in minutes to hit for a moment $186.43, after having skyrocketed 39% on Friday. In less than two weeks since the IPO, shares had soared by 645%, giving this outfit a market capitalization of about $11 billion, though it’s just a small maker of fake-meat hamburgers and hotdogs.

This kind of stuff is a dead-give-away that market insanity has reached a peak.

But I was wrong.

June 10, at 9:59 AM was not the moment of peak-insanity, as we know with hindsight. Yes, BYND plunged 32% in two days, from $186.43 at the peak on Monday to close at $126 on Tuesday. But then in a final paroxysm of peak-insanity, algos and human traders drove the shares to $239.71 on July 26.

Then it too crapped out. Today, the shares trade at $141.34, down 41% from the peak, and down 24% from my June 10 pinpoint-date:

So I was wrong. The moment of “peak-insanity now,” after which all this stuff implodes, wasn’t June 10 after all. If Beyond Meat is the measure – and in my book it is because it’s a minuscule company that sells fake meat burgers and hot dogs in a crowded market that has been around for a long time and has no barriers to entry – so with this stock as the measure, July 26 was the moment of “peak-insanity now.”

But it was foreshadowed by the Lyft and Uber fiascos, and it was after-shadowed, so to speak, by the mega-IPOs that got out the IPO window but have since crashed and burned.

WeWork was just late to the defenestration party. By the time it arrived to jump out the IPO window and crush stock market jockeys, the unicorn-startup bubble was already imploding, and it never made it out the window – and at least in this case, a massive wealth transfer was stopped in its tracks.

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  99 comments for “When Was Peak-Insanity of the Unicorn-Startup Bubble That’s Now Imploding?

  1. Petunia says:

    defenestration: I learned a new word.

    I think the peak was the Alibaba IPO — it represents zero equity and they still sold it. They didn’t even lie about it.

    • John Taylor says:

      “Defenestration” is a term coined to mark an event in the protestant reformation.

      The Catholic representatives were tossed out of the window in Prague, coming from the German word “Fenster” for window.

      The Catholics landed on a pile of dung and survived, declaring it a miracle, while the Protestants remarked that their landing was quite fitting.

      • Petunia says:

        Thanks, interesting origin.

      • Scott Nash says:

        Really? I thought it was when you replaced Microsoft machines with Macs.

        • robt says:

          And became a member of a cult. At 3 times the price.

        • Em says:

          The oldest computer it turns out dates back Adam and Eve’s time. And surprisingly it was an apple. It had very small memory: just one byte and… it crashed.

        • andy says:

          no in 2006 when apple changed from Motorola chips to Intel and adopted the architecture of fix, patch, need to upgrade culture of brainless programmers and “hve no idea” users. we should claim usd 50/per hrs. waiting and need to upgrade for safety i.e system is not secure.

        • lisa says:

          another perspective- when Microsoft machines got replaced with Softbanks.

      • GirlInOC says:

        huh, I did my writing pro-sem paper on St. Bartholomew’s Day massacre and don’t remember coming across that term. So I wiki’d and it looks to predate the Reformation. Maybe it was popularized in that era due to the increase in protestants and Catholics being tossed out of windows. lol, perhaps it’s the historical early version of GTFOH


      • To prove how far financial engineering has come, the upper floor windows on a modern building cannot be opened.

        • RD Blakeslee says:

          I was a patent examiner when the Patent Office moved from the Main Commerce Building at 114th and Constitution avenue to Crystal City, in Arlington across the railroad tracks from Washington National Airport (Now named Reagan National).

          My office was on the 13th floor and it had those unopenable heavy glass windows.

          The Arlington Fire Department ladders could reach only as high as the 10th floor, so, being a practical person that didn’t want to risk getting barbecued, I bought enough nylon rope to reach the ground, tied one of those old-fashioned cast iron sash counterweights to one end of the rope and the other end to a desk leg. Put some leather-lined gloves in a desk drawer, preparatory to smashing the weight through the window, donning the gloves and sliding down the rope to safety, had the need arisen.

          Just a smidgen of the lore Blakeslee left behind in the P.O.

        • Dan Romig says:

          RD, that is a great representation of the cliche, “Hope for the best; plan for the worst.”

          Hope for the best is the mantra of these unicorn IPO offerings.

          Peloton has not made any money. They do not make money. They might generate profit in four years.

        • WSKJ says:

          Loved your story. Blakeslee. A time-honored tradition, working in the patent office: Einstein did so as well.

          Between the “financial engineering” (above Ambrose Bierce) of designing the modern skyscraper with upper-story windows which cannot be opened; and central banks doing their parts to prevent bankers and investors from feeling the need to jump out windows, I think we expect solutions other than defenestration, in the modern financial crisis.

          Thx all.

      • Calm Horizons says:

        re: John Taylor

        The root etymology would be from Latin: de- “down from”, and fenestra, “window” (from which the German word stems from).

        Props to Wolf for using one of my favorite words. And yes, the infamous Defenestration of Prague: even if one doesn’t know or remember what happened, the phrase sticks in one’s mind :) (Also one of the triggering events for the 30 Years War.)

      • roddy6667 says:

        In French, window = fenetre.

        • Em says:

          Fereastra in Romanian

        • BringBackTheMonarchy says:

          And used to be spelled “fenestre” in the old days.

        • MrILO says:

          Actually, defenestration comes directly from Latin language.
          De- is the prefix, which in general has the meaning ‘coming from’, or ‘moving farther away from’, ‘remove’ (complement of motion from place). Fenestra / fenestrae is window. The origin of ‘De-fenestrate’ is now clear, I guess.
          De-grease, de-moralizing, de-foliate (folia / foliae, leave – remove leaves)

    • R2D2 says:

      Almost all major Western bubbles burst at the end of a decade. Humans like to unwind their positions at a fin de siecle. End of an era. 1929… 1987… 2007-2009… 2019…

      • Vespa P200E says:

        How about 1999 (Party like 1999)?

        I was just out of college and didn’t feel the pain of 1987 but somehow today’s mantra of hyperbolic growth at all cost and SillyCON valley in the center reminds me of 1999 dot-CON bubble. Back then some chumps in Yahoo msg boards were saying profits are for the pxssies…

        Well where art thou pets.con (replaced by Chewy), etoys.con (even Toys R Us went under), webvan/homegrocer.con (Amazon?) and slew of hardware networking companies.

        We learn history so as not to repeat it

  2. Wolf Richter says:

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    The mug with free shipping in the US will set you back $25, *beer not included.

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  3. Rowen says:

    So if the stock market has been mostly propped up by debt-financed buybacks, because there’s no retail funds available, where was the cash for these IPOs to come from? Not pension funds because they’re so overweight older workers have been cycling stocks for bonds (driving yields to ZIRP).

  4. CreditGB says:

    I was taught to avoid insanity and more importantly, insane people, along with Ponzi schemes too good to be true. This whole episode of shoveling cash into a roaring furnace that won’t even give off any heat, is just insane, too good to be true, and definitely a Ponzi scheme.

    • GirlInOC says:

      They have whole topics like this on reddit….what things are trashy when poor people do it, but classy when rich people do it. For example, Get-rich-quick-schemes. When it’s just part of a game for the wealthy, eh…just a game. But for the poor, these things are quickly shut down and all the jail time.
      (a few fun ones: bankruptcy, ripped jeans, drugs, living off parent’s money, old cars, gambling…basically everything lol)

  5. Wisdom Seeker says:

    My only problem with the “Peak Insanity” concept is that it implies that there must have been a prior “Peak Sanity” point, and a future return to sanity.

    When was Peak Sanity? Between the dot-com bubble and the Great Financial Bubble? Between the 2009 crash and the start of the Everything Bubble? Or have we just been going from one insanity to another, blowing fresh bubbles at every stage, for the past 30-plus years?

    If so, this may not be Peak Insanity, but merely a pause on the Path of Perpetual Insanities?

    • Jessy S says:

      We have been going from one insanity to another. I suppose what is next is that NFL teams will IPO starting with the Cowboys.

    • Tonton says:

      Wisdom Seeker; with a different sentence structure, that could well be a poem.

    • monday1929 says:

      New “Permanent Plateau of Insanity”?

  6. Wisdom Seeker says:

    P.S. Peak Insanity may not be in the USA at all, it might be in Europe or China. And one of the deeper roots must be the idea that insanity is ok as long as you can get someone else to pay for it… A deep moral failure. Perhaps economics needs to return to its roots as a branch of moral philosophy, instead of pretending to be a science?

    • d says:

      You should know by now, since WW I ALL FINANCIAL CRISES and market implosions, start in, and are the responsibility of the US.

      Yes the enlighten know this is a lie.

      However try convincing: Europe, Asia and the MENA (where all but Israel ALWAYS agree, all evil comes from America) of that.

    • lisa says:

      Very Good! My two bits, not worth anything!

  7. cas127 says:


    “In less than two weeks since the IPO, shares had soared by 645%, giving this outfit a market capitalization of about $11 billion, though it’s just a small maker of fake-meat hamburgers and hotdogs.”

    Okay, I’ll sign on to the idea that Turnip burger was Peak Silicon Stupidity 2.0.

    *But* – as I’ve asked elsewhere (ie, securitizations of known unqualified borrowers), the really key question/issue is…who invests in this sh*t?

    If it is the wrong group of leveraged investors, then a series of cascade failures can be triggered – leading to much wider macro-economic downturns.

    I don’t think this is the case with IPO dead heads – a lot of their investors are probably SF area capital market naifs who got “lucky rich” once and are en route to losing much/all of it back.

    But the last 20 years have seen such an abundance of doomed, asinine public investment opportunities that it really always pays to ask the question, “Who is buying this sh*t?”

    • polecat says:

      Yes .. we could, for the historical record, name it the 20yrs Neoliberal Malinvestment War.

    • MD says:

      The point is it doesn’t matter who’s buying, or what they’re buying, as long as there’s a bigger fool to sell on to.

      This is the crux of all asset bubbles, is it not? There’s no interest in real, intrinsic value – just in hoiking it on to the next smart guy (if he can also shift it for a fast buck) or sucker (if he’s the one holding when the music stops).

      Can I interest you in some coral, or tulip bulbs..?

      • cas127 says:


        “The point is it doesn’t matter who’s buying”

        1) I think it does matter – here’s why,

        2) There are *many* highly leveraged players out there (hedge funds, etc)

        3) Many of those highly leveraged players are by definition in hock (owe money to) to *other* financial market players – and so on.

        4) Some of those creditors are believed to be much more stable than perhaps they really are (because some/a lot of their “assets” are semi-crappy to very-crappy loans to highly leveraged players – if only via one or two generations of lending removed).

        5) In a bad news cascade failure, IPO implosions take down hedge funds (or other highly leveraged players) and all of a sudden “good” loans go bad – leading to a potential domino effect – if the wrong banks (big ones) have made the wrong loans (poorly secured ones) to the wrong debtors (highly leveraged players investing in the base markets – IPOs here – that have/will blow up).

        6) Today’s financial markets are (still) highly, highly interconnected.

        7) Probably more so because near ZIRP policies have starved every saver on the planet of yield – herding them into highly correlated higher-risk kill boxes.

        8) So every dumb-ass investment that implodes (and there are a universe of them on offer out there) can have effects that are much further reaching than is popularly understood.

        9) (Although the 2008/2009 implosion should have taught everyone a major f-ing lesson about poorly anticipated cascade failures and investment return correlations in a near ZIRP world).

        10) So, I think it does matter, “Who buys this sh*t?”. Also, exactly who is lending to these morons?

        11) Decent example (although the scale is probably too little to matter macro-economically) – look at some of the major, “name” banks that made hundreds of millions in loans to the (now-ex) CEO of WeWork – secured by his (now seriously impaired) stock.

        12) Also, who sells this sh*t – and how do we end them.

    • roddy6667 says:

      I believe that lot of the money comes from virtue signallers who desperately want to boost their image as “green” or “woke”.

      In some Millennial circles, I imagine that “I’ve got a deposit on a Tesla” or “I’ve got shares in Beyond Meat” will get a guy laid.

      • HowNow says:

        If it’s now that easy, I’m wondering if you meant 2-legged or 4-legged?

        • cas127 says:


          So baaaa-d.

          “Beyond Meat”, SV singles bar pick-up line –

          “Are you in the moo-d?

    • Rat Fink says:

      PE firms invest in this sh%t. They are looking to start (or jump on) a wave, and unload the sh&t to others who are hoping they can also get off before the wave crashes onto the rocks.

      The interesting thing with Softwank is that with some of their investments (I believe Wewank is a case in point) they were the only/main investor.

      So they started the wave and threw in more cash at higher valuations creating hype – and an ever growing wave.

      They were likely planning to hop off with an IPO (having seen what happened to other unicorn IPOs) however the wave hit the rocks before they could do that.

      It’s a great ‘business’ model if it works. As always, timing is the key. It sucks to be sitting on a bubble when it explodes.

    • Clete says:

      @cas127: This should always be the question. Thanks for putting it so succinctly.

      One thing I would add: “W.B.T.S., and in what mutual funds?”

  8. Rashaverick Overlord says:

    Perhaps this all comes down to the same achilles heel from Michael Lewis’ salient read, and subsequent movie, THE BIG SHORT? The valuations on WeWork, as with many ipo campaigns are falsified, just like the sub prime mortgage bundling markets, as with valuations being hyped in the dot com crash, as the valuations where complete nonsense in debt swap convertibles, as was the case in Mike Milken’s junk bonds, Madoff’s ponzi fraud, vc hype like Thernaos, etc. So when I hear, or read, extraordinary multiples or yields, immediate red flags go up, as to another pump and dump. As the late Carl Sagan one suggested, “extraordinaey claims require extraordinary evidence”. CAVEAT EMPTOR, let the buyer beware.

  9. Lance Manly says:

    I never really got Slack. I have to use it on some projects but it never really impressed me as something I enjoyed using.

    • Kent says:

      Well it was supposed to disrupt Outlook. Or something. It is a very marginally less crappy way of keeping track of communications and files. So, yeah.

      • Rat Fink says:

        I’ve noticed that on my laptop MS Teams suddenly started to auto-launch in the past couple of weeks. This free software is what MS is using to destroy Slack.

        When MS can do this for free, that is an indication of the barrier to entry as well as the value of slack.

        As Chanos says about Tesla, I say about Slack. ‘We think the equity is worthless’

        • intosh says:

          MSFT can do it for “free” and use its Windows monopoly to beach-head their other products down enterprise slaves’ throat. Teams will eat Slack’s lunch and OneDrive Dropbox’s.

          But when MSFT gives with one hand, they take with the other — they tweak their Windows licensing so customers end up paying more for that and there’s notthing the corporate slaves can do about it.

          The Windows monopoly is MSFT’s beach-head for Office, Teams, OneDrive, Azure and Surface devices.

          “Behind the scenes, however, Microsoft has made some not-so-subtle changes to their licensing that make it more expensive for organizations to transfer their on-premise Microsoft solutions to any cloud that doesn’t belong to Microsoft. In other words, Microsoft is sending a clear message that it wants you running your workloads on Azure. This type of behavior is not new for Microsoft.

          Cost reductions sound great but there is a large asterisk next to that cost reduction potential; you have to use Microsoft’s cloud. If you choose a competitor’s cloud, such as Amazon Web Services (AWS) or Google Cloud Platform (GCP), Microsoft is going to hit you with increased fees. In reality, this is really just a penalty for engaging with Microsoft’s competition.”


    • Petunia says:

      From what I’ve seen it’s a private message board. It can support a company or any small group that wants a private messaging board. The group controls access but they are free to discuss anything. It’s not a revolutionary concept but it has its place in the age of censorship.

    • Clay says:

      When I first had to get on Slack thanks to a couple companies I was working with, the cool thing about it was the ability to have everything (messages, files, formatted code snippets, other team members) in one place and to switch between companies and workspaces by just clicking on another team icon.

      That was… a pleasing sort of convenience. But only if you can get most of your communicating done there and don’t have to still use other legacy software.

      Over time, the race to see who was most engaged with Slack statistics and have ‘I posted it somewhere on Slack or in a wiki’ take the place of actual communication made is less of a unequivocal improvement.

      And of course, who knows what I’d pay for it in stock or pro subscription fees if I had to…

  10. Stephen says:

    With all the Pump and dump IPO non-sense going on, I have wondered why we have not witnessed much more market turbulence and general market failure. My best guess is that the governments and central banks of the world will not be caught off guard this time. I think there is EVERY manner of ponzi funding going on to keep this show going, from fiscal policy, to QE, to interest rate manipulation, and beyond. I am not saying it will last forever, but there is definitely a coordinated response across countries and central banks. I am not saying they are coordinating every move in closed door sessions, but they are definitely maxing out whatever means they have at their disposal. I think the governments and central banks of the world are quite aware of the repercussions of a failed global fiscal/monetary system. We are talking wars, revolutions, and all matter of civil disturbance on a global scale. They will do anything to avoid this! It disturbs me that they will not be successful for too much longer.

    • lisa says:

      RE: “I am not saying it will last forever, but there is definitely a coordinated response across countries and central banks.”

      Currencies exchange valuation trend, purchase parity and float.

  11. Bruce T. says:

    Some years ago there was an April Fool’s joke about switching to “metric time” since we had already switched to metric everything else in Canada (1981). I was thoroughly amused by your use of “9:95” a.m., which puts us, on metric time, very close to noon!!!
    As to all these stupic IPO’s, I am reminded of an old Chinese proverb, “You cannot pick up a turd from the clean end”.
    Thanks for all you do Wolf, even reminders of old time switches!

    • Wolf Richter says:

      Yes, I’m now on metric time, because it’s easier. At least I was until I fixed the transposition :-]

      • Jessy S says:

        No fooling! Once in a 7th grade math class, I tried to figure out metric time. It turned into a horrific failure.

    • medial axis says:

      The French took metrication (of everything) seriously[1].
      I seems they also set out and physically measured the circumference[2] of the world at the equator, with many dying in the effort[3]. The (lovely) irony of that monumental effort is that they found out later they’d got the measurement wrong!

      [1] See wiikipedia, “French Republican calendar”, for a start.
      [2] The metre is defined as a sub division of the world’s circumference.
      [3] Holding a theodlite at the bottom of an ocean is a tad risky.

  12. Cyclops says:

    Trumps potential restrictions on Chinese IPO bubble seems to Have hit session higs! IMO this debt fueled IPO bubble will be much worse than Dot Com crash!

    Trumps 1.5 trillion corporate tax cuts is a terrible stimulus that postponed the debt fueled bubble for another year is mostly finished except large Caps. All of that was wasted on stock buyback that G W Bush lifted the ban two decades ago!

    Maybe Warren will bring back the stock buyback ban..)))

    • TXRancher says:

      Actually stock buybacks were legalized in 1982 which would be during the reign of Ronald Reagan.

      • wkevinw says:


        It seems like (my opinion) buybacks should be legal. Let the companies be stupid like everybody else: they usually lose money on the buybacks (the corporation loses money).

        The bad part appears to be that they use them for compensation, which is income by another name. Because they have a holding period and are equity, they get taxed as capital gains in many cases, from what I understand.

        Anyway, if they were taxed as regular income (by the recipient- usually execs), I am thinking the abuse might stop. (as long as they can’t reprice, etc.)

        • cas127 says:


          ” Let the companies be stupid like everybody else”

          Hmmm…except that buybacks allow corporations to (temporarily) manipulate/support their rising shares prices…only to multiply the impact of their collapse when…

          1) A recession hits,

          2) Panicking shareholders into selling,

          3) And *also* gutting corporate earnings,

          4) Just at the moment when those earnings are needed…

          5) To keep supporting those previously inflated share prices…

          6) Leading to *deeper* share drops, causing…

          7) More shareholder panic.

          In a recession/downturn, a history of large buybacks is likely to *amplify* the fall in share prices – as a prime historical support of those prices (corporate earnings routed into buybacks) – evaporate.

          Now, on the other hand, the market is so utterly, utterly, utterly addicted to buybacks providing the main support for share prices, that *any* diddling around with the current rules would almost certainly lead to a serious market collapse.

  13. lisa says:

    RE: “Having become CEO of Nasdaq in 2003, I saw up close the damage caused by the growth-over-profits philosophy in that earlier era, and WeWork’s spectacular fall – from the year’s most anticipated IPO to a company with a speculative-level credit rating that may run out of funds within a year – rings many bells.”

    Back in 2003, at least there was some pretend-like growth semblance to some imaginary growth-over-profits philosophy, in 2019, even that pretense is a long gone “poof”!

  14. Island Teal says:

    Im still stuck on anyone naming a company SLACK.
    That is the top limit of..Youve got to be kidding me – You work at
    SLACK !!!!
    IPO was at $37 and now sits at $25+
    Anyway …….LMAO

    • polecat says:

      Any VCs out there care to kick some Quatloo$ my way .. ??

      I’ve developed this new concept called Wrinkles .. it’s Wayyyy better then Slack !
      I just need to iron out a few kinks first.
      Any takers ?

  15. Thomas says:

    Ponzi schemes don’t age well so it’s wise to get out of them before they mature. When the entire monetary system begins smelling a little “ponzi”, and when ALL that’s left begins appears to become one humongous ponzi, then YOU, if you act now, can make YOURSELF filthy rich selling THE ONLY elusive cure for which I, and I alone have the secret formula!
    Send $99.99 in a self addressed envelope to…..Protect yourself today!

  16. David Hall says:

    In 1999 there were 387 IPO’s. The Nasdaq market was overpriced. The help wanted section of the Sunday Washington Post was full of tech job listings. Blue collar workers were taking classes to try to become network engineers or C++ programmers. Digital cameras were too expensive. People bought film. In 2000 Robert Shiller published, “Irrational Exuberance,” and the market started to crash.

    2019 is different. NIRP, student debt crisis, real estate bubbles, commercial real estate risks, trade war, impeachment, Saudi-Yemen border conflict, mfg. downturn, rising sea level, etc. I forgot to add unicorns and zombie corps.

    • David Hall says:

      Zombie corps should have been printed zombie corporations. These are companies that have huge debts and not enough income to cover the monthly payments.

      More people are predicting a coming recession.

  17. Mike R says:

    Until this global bubble in EVERYTHING is pricked, and the US market drops 90%, its ‘peak insanity’ all day, every day, continuously in every corner of the markets. With the insane levels of credit created out of thin air, fiat dollars have sloshed into every single nook and cranny. There are no undervaluations, there is no stone to be overturned, as the chase for yield going longer than 10 years now, in an environment of $17 trillion globally, in negative yielding debt, how can anyone possibly be at all surprised that these whackjob concepts get way overblown, and then immediately get crushed bc they werent ever worth the paper they were written on. So people have nothing to go after except for hype. Tesla is the poster child for hype, a company that can’t possibly ever be profitable, with every single vehicle costing way more to produce that they sell for, and every one of them massively subsidized, not only by the government, but by know nothing ‘investors.’ The hype is so overarching, from Tesla, it all seems ‘normalized’, and people take fiction for fact, and cannot discern the difference. Accounting rules have been so watered down, that its pretty much anything goes for whatever companies want to report. There is zero integrity left in any market, in any company, in and product, or even service. This is not an exaggeration. We are skeptical of the wrong things. Don’t confuse skepticism with cynicism. We have cynism going on in spades, because barely anyone knows what it means to have and maintain integrity. The ‘incentives’ for it are long gone. People ‘long for the old days’ mostly because they were not only simple, but there wasn’t yet 1000 ways to sunday to scam and manipulate everyone, with an exponential increase of that mischief, primarily connected to the explosion of the use of the internet.

    • Rat Fink says:

      We should not be surprised by this phenomenon Mike.

      • Happy1 says:

        Like that the earth can be saved by banning plastic bags and single use straws? Or believing that the West can meaningfully affect the climate in any way by any of the proposals put forth by the mainstream media or virtue signaling celebrities? I hear more pseudoscience in five minutes of media coverage of any given hurricane then from any religious organization over the course of a year.

      • Rat Fink says:

        After all, humans are prone to mass delusion.

  18. Kasadour says:

    and at least in this case, a massive wealth transfer was stopped in its tracks.

    One massive wealth transfer was stopped. How many other massive wealth transfers weren’t?

  19. Gian says:

    If Uber and a Lyft are forced to classify their drivers as employees rather than independent contractors in CA come Jan 1, 2020, you can bet their stocks will take another beating. New York, WA and Oregon are following this closely and will follow suit if CA prevails against these companies.

  20. tom says:

    Taxi cab companies, streaming reruns, and fake meat companies.

    Always chuckle when I drive by a house that sells “organic” fire wood.
    Who knows could be a future IPO.

    Time for supper: fresh venison backstraps…organic fed & free range.

  21. Eastwind says:

    When a coal mine collapses, everybody knows the moment. So those (other) articles pointing out that the WeWork IPO failure is the moment the IPO market mine collapsed are indeed not very useful, and certainly not prescient.

    What’s more useful is to pinpoint when the first canary keels over. That can’t really be done before the fact, as your infamously-linked article illustrates.

    And it’s all well and good to go around taking out life insurance policies on live canaries while they’re happily singing away deep in coal mines, preaching to one and all that their days are numbered. There are really all too many people writing that kind of article. While they will ultimately be proven correct, it doesn’t really win any points with me.

    By way of example, I read an article today titled “this is insane” that included some chart porn showing the divergence between the S&P 500 index and S&P 500 corporate post-tax profits. Yep, it’s insane, but the canaries are still singing, and it ain’t over till the fat one stops singing, or something.

    Calling the moment, in the moment, and getting that “This is IT” quote right on the screws, is a lot tougher than predicting an eventual reckoning.

  22. Gordon Bunshaft says:

    How is Beyond Meat, still trading at 145 a share not still in peak insanity valuation territory? I think you need to rename peak insanity to peak mass delusional insanity. There’s a long way to go before there’s some semblance of normality. I’m a vegetarian, and will never eat a beyond or impossible burger again, that sh*t is nasty processed junk food, I’d rather eat real meat. It’s healthier. Most people I know feel the same way.

    • cas127 says:


      “still trading at 145 a share”

      But it only takes a handful of marginal, valuation morons to set the marginal price.

      (Or insiders/I-banks impersonating organic demand).

      Once they capitulate (or get liquidated), the Wiley-Coyote-Over-The-Cliff-Valuations they support drop like an anvil.

  23. Eamonn Harter says:

    A while back we heard that Tesla would run out of cash by the end of this year. Is that still the case?

    • medial axis says:

      I thinks it’s now more likely the other way round. We’ll run out of year before Tesla run’s out of cash.

    • mikey says:

      Tesla has been predicted to run out of money soon for as long as I can remember. As in the dot com bubble, it does not matter. So far, they have been able to keep getting it and with zero interest rates they can keep this going another 5 years unless their cars start killing people in large numbers.

    • Martin Heck says:

      They sold new stocks and a convertible bond, bringing in 2 billion in the spring.

    • Wolf Richter says:

      Eamonn Harter,

      Did you forget? In early May 2019, Tesla sold new shares and convertible bonds and raised $2.7 billion that way, which gives it some fuel to burn. Investors continue to be willing to hand over their money to Tesla for Tesla to burn.


      Tesla hasn’t run out of money because investors keep giving it more money to burn. This story has been the same for 12-some years, it’s only getting bigger as Tesla needs more and more money to burn. The May fund raiser was the largest ever for Tesla.

      • cas127 says:


        Unlike the phantom scaling involved in market caps (ie, marginal valuating moron sets the total “worth” – cough cough – of a company by coughing up enough dollars for .01% to 10% of a company), straight capital raises actually have to put up $ or shut up.

        In other words, some purblind suckers actually ladled a *new* $2.7 *billion* into the curdling Tesla stew.

        And that’s *real* money – money you can buy beer with – not locked-up, paper-gain shares.

        So, again, WBTS?

        (Actually, invisible games are being played in full-cash capital raises as well – games that helps to explain WBTS.

        Namely, not all shareholders/creditors are created equal – despite what said shareholders/creditors may think…especially the earlier ones…

        Later stage shareholders/creditors can insist upon terms (valuation ratchets, etc.) that *guarantee* a defined rate of return before prior shareholders/creditors get jack *sh*t.

        That does help sh*tty investments go down smoother – by expropriating some/all of earlier investors’ “gains”

  24. BeyondBeyond says:

    I finally got around to trying a ‘beyond meat’ burger last week. It’s ‘beyond me’ why anyone would buy this crap. It tasted like a beetroot / pea not-so-spicy beanburger. the kind you can pick up for cents, not dollars. Whata laugh.

    • cas127 says:


      Beetroot burger just illustrates the residual power of the slowly dying MSM and lucky PR…mindless media hype made BeyondMeat.

      Next up – Impeachment Burger.


  25. Clete says:

    @Wolf: “But I was wrong” is the single phrase I value most. You never ever ever see that in financial media (or any where else, really) — kudos to you for including it.

    • Blue says:

      Collectively I count the distressed unicorn group having a $1.5 trillion market cap.

      In about 6 months ETFs will be forced to buy their stocks at any price and all these distressed companies won’t be owned by billionare robber-barons anymore, they’ll be force-fed into the ETF retirement accounts of he average person.

      I don’t think the bubble has actually burst yet, I think investors are manipulating the price to stay high until they can get out of the way and leave the common man holding the bag. What happens when a large part of $1.5 trillion in stocks goes bankrupt?

  26. Agnes says:

    My hero, John B. Goodenough just got the Nobel Prize. Maybe it’s time to pay attention to his work.

  27. IslandTeal says:

    Remember… “Everything will be OK. Just BTFD”.

  28. WSKJ says:

    Seems like the crashes are always preceded by some kind of craziness in the Market. To try to gauge where the heck are we now, it’s always worth visiting Advisor Perspectives, to which you may find a link that Wolf posts in the left-hand column.

    Especially worth a look is Perspective on Secular Bull and Bear Markets, October 2, 2019, by Jill Mislinski. The market continues well above the long-term trend line; and the peak-insanity, that Wolf posts about above, is one more indication that a major correction is overdue. Oh !, but wait, many of us here at Wolf Street have been saying that for a while. Beyond Peak !!!

  29. Americans look forward to the stock market crash because they think that they’ll be able to buy homes cheaply.

    Americans don’t realize that when the US Ponzi economy collapses, ATM cards won’t work, banks will close, companies will shut, cash will be worthless, the water and electricity won’t work, there will be no government workers to transfer titles, there will be roving mobs of starving people, and there will be no police to protect property.

  30. cas127 says:


    Cats and dogs sleeping together!!!

    ““Oh, uh, there won’t be any money, but when you die, on your deathbed, you will receive total consciousness.” So I got that goin’ for me, which is nice.”

    Big hitter, the Lama.

    – Bill Murray

  31. sierra7 says:

    Something positive has to come out of all this……Having just emerged from the PG&E “mass” California energy shutdown I have days of WR articles to go thru. I think that makes the whole outrageous “inconvenience” worth it!
    During this “energy” infrastructure examination by PG&E over 750,000 CA residents were discombobulated of their utility delivernce(s). Living in the foothills of the Sierras I received several calls from friends shopping for example in Sonora CA that the place was berserk. Shelves being stripped of batteries, gas cans, canned goods, water; all the signal lights were out which made the episode more bizarre.
    I didn’t leave my home; used camping stove, lantern and thanked the “Gods the Be” that the test was being done in the Fall of the year and not in the dead of winter.
    Observing, reading (on social media) and listening to the stories of what has taken place “in the flatlands” I am reminded of the reasons I moved here in the first place way back in 1999. To keep me away from these kinds of human reactions in a crisis.
    There is still to be a reckoning between the CA residents who live in fire prone “risky” areas, PG&E, and the major homeowners insurance companies.
    My humble opinion about “cash” in any coming crisis: I believe that cash will play a role since a possibility that ATM’s (etc) may not work. Show me the cash.
    Now, to continue into my backlog of WR articles…..

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