While stocks seemed Coming back on Friday after another scorching week of massive sales, it’s a given that software ratings are testing new levels of price depression.
The fall in all those red charts down and to the right is doing massive damage: the decline in the value of public software vendors has been a key leading indicator of the current downturn in venture capital activity, for example, and the ability of startups to push their own valuations higher.
However, day-to-day coverage may provide snapshots instead of fuller images. So this beautiful Saturday, I want to slow down and take stock of where software valuations are (SaaS, indeed).
The small reality of SaaS valuations
There is no need at this point to celebrate the number of investors who got it wrong last year. Markets have a way of teaching their own lessons; we don’t need to add to the price notes provided by the pauperization in the public market of recent tech IPOs or the panic that overvalued unicorns feel when comparing their revenue base to their listed price.