Twitter’s Slide Could Affect Private Tech Values

Twitter shares continued their seemingly endless slide on Tuesday, amid a wildly volatile stock market that appears to be hitting particularly hard tech companies with weak growth prospects.

While some tech stocks rose on Tuesday, such as Fitbit, others such as Etsy and Box continued a steady decline. Etsy, like Twitter, has been affected by concerns about growth of its user base while Box has a different issue—struggling to control costs. Both Etsy and Box went public last year and have sold off steadily since.

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David Yuan, general partner at Technology Crossover Ventures, said public market volatility was creating a "chilling effect" on private markets, but that companies could still succeed under the circumstances. "The best private and public company CEOs are hunkering down and aggressively pushing for growth and innovation, but under the constraints of the cash available for them.”

George Zachary and David B. Stetson commented on this article.
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Privates might be able to rightly argue they have more upside ahead of them than Twitter but in a ‘risk-off’ market like I think we’re seeing now, investors are likely less willing to give credit for growth that hasn’t happened yet.