The unicorns are dying.

Markets seemed to really wake up to the plight of the unicorn when WeWork aborted its much-anticipated IPO, but the air started coming out of the unicorn bubble long before WeWork’s IPO demise.

Unicorns are privately held companies valued over $1 billion. Companies like Lyft, Chewie, Uber and WeWork were the darlings of WallStreet. Their IPOs were much-anticipated by investors. They are also the poster children for easy-money induced market mania, and their IPOs were crucial for maintaining the bubble.

In an article published on CNBC, former Nasdaq CEO Robert Greifeld compared the unicorn implosion with the popping of the dot-com bubble.

“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.”

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Greifeld highlighted a number of comparisons between dot-com mania and the unicorn frenzy.

Funding feeding frenzy.

Messianic founders.

Governance is for saps

The ho-hum in sexy packaging

Unsustainable business model.

You can add one more comparison to that list – easy money. The dot-com and unicorn bubbles were both made possible by Federal Reserve policy that kept interest rates artificially low and allowed companies like WeWork to leverage up and operate for years without making a profit. Speculative money flowed into these companies.

In a nutshell, these companies never bothered with making a profit. They were focused on the IPO. The strategy was to cash out on the backs of stock market investors who didn’t care whether or not the company was making money. They sacrificed profitability to deliver value to the customer in order to create a “sexy” story.

Peter Schiff has talked extensively about these unicorn companies in his podcast. These money-losing stocks are putting a significant drag on the markets. As Peter put it, these stocks are the weak links in the chain. The weak links break first and the rest of the chain follows.

“If investors are no longer willing to finance money-losing companies, if that type of speculative fervor has come to an end, this is a huge bell ringing on Wall Street, and it has massive implications, not only for the stock market, but for the overall economy.”

WeWork woke a lot of people up to the problem, but it was hardly the beginning. Consider the plight of these unicorn IPOs.

On the first day of trading, Lyft shares plunged 10% after an initial pop to $88.66. Today the stock is trading around $39. That’s a 56% decline since the IPO pop.

Uber was hoping for an IPO of $120 billion. Then the company announced it had lost $10 billion in three years. Uber went public with a $45 per share IPO for a total valuation of $82 billion. Today the stock is trading below $30, down 37% from its peak and 34% from the IPO price.

Then there was Beyond Meat. It initially surged in a vivid display of market mania after its IPO, rising 645%. It traded as high as $239.71. Today, the shares trade at just over $141.34, down 41%.

Here are some other unicorn IPOs and their fates compiled by WolfStreet.

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.

WolfStreet summed up the unicorn fiasco.

“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 canceled. 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.”

It’s another refrain of an all-too-familiar song- the Fed inflates bubble – bubbles pop.

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