Technology companies lost more than $ 17 billion in capital investment in the first quarter
A Rivian electronic Amazon truck drives onto the street with a Hollywood sign in the background.
Amazon
Sales of 2022 technology have accelerated over the past two weeks as Q1 sales reports highlighted issues such as inflation, supply chain shortages and the war in Ukraine.
For some tech leaders, the flagging market has taken a double hit. Aside from handling the winds of action, they were among the most active investors in other companies during the extended bull market that hit the wall late last year.
Welcome to the brand's accounting issues in the market.
Amazon , Uber , Alphabet , and Shopify all reported billions of dollars in capital losses in the first quarter. Add to that reports from Snap , Qualcomm , Microsoft and Oracle , and total losses between holdings in tech companies topped $17 billion in the first three months of the year.
Investments that once seemed like genius, particularly high-growth companies lined up for mass IPOs, are now producing dangerous red paint. Nasdaq fell 9.1% in the first quarter, its worst in two years.
The second quarter looks worse as the heavy tech index was up 13% after Thursday's close. Many high-quality publications have recently lost more than half of their value within a few months.
Businesses use different colored terms to describe the cancellation of large investments. Some call them non-operating expenses or unrealized losses, while others use terms such as revaluation and changes in fair value. Regardless of what language they use, tech companies are reminding themselves that investing in their industry peers is risky for the first time in more than a decade.
The latest losses came from Uber and Shopify, which released first-quarter results this week.
Uber said Wednesday that $5.6 billion of its $5.9 billion quarterly loss came from shares in Southeast Asian transportation and transportation company Grab , autonomous car company Aurora and Chinese giant Didi .
Uber first acquired its shares in Grab and Didi by selling its regional business to related companies. The deals appeared profitable for Uber as personal valuations rose, but shares in Didi and Grab fell after they went public in the US last year.
On Thursday, Shopify reported a $1.6 billion investment loss. Most of it comes from online lender Affirm , which was announced last year.
Shopify acquired its stake in Affirm through a partnership formed in July 2020. As part of the agreement, Affirm Shop Pay and Shopify became the exclusive point of sale for payment services, and Shopify was directed to purchase up to 20.3 million shares. every cent.
The affiliate fell more than 80% from its November highs, leaving Shopify with a big loss for the quarter. However, with a confirmed trade at $27.02, Shopify is still well above its original investment.
Amazon was the tech company that suffered the most from its quarterly investment. The electronics retailer said last week the electric carmaker lost $7.6 billion to Rivian .
Rivian shares fell about 50% in the first three months of 2022 after debuting on the public markets in November. Amazon has invested more than $1.3 billion in Rivian in a strategic partnership with EV that aims to produce 100,000 delivery vehicles by 2030.
The Rivian R1T electric pickup truck during the company's IPO in front of the Nasdaq MarketSite in New York on Wednesday, November 10, 2021.
Bing Guan | Bloomberg | Getty Images
Rivia's oversupply coincided with greater turnover in tech stocks, fueled by rising inflation and higher interest rates late last year. That trend has accelerated this year as oil prices continued to rise following Russia's invasion of Ukraine in February and the US Federal Reserve hiked interest rates.
Last week , Alphabet reported a $1.07 billion capital loss due to "market volatility." UiPath , Freshworks , Lyft , and Duolingo , Google's parent mutual funds, have stakes in the company that fell from 18% to 59% in the first quarter.
Qualcomm reported a $240 million loss in trading securities "primarily due to a change in the fair value of some of our QSI-traded equity investments in early-stage or early-stage companies." QSI, or Qualcomm Strategic Investments, invests in startups in artificial intelligence, digital health, networking and more.
"The fair value of these investments has been and continues to be volatile," Qualcomm said.
Snap, meanwhile, said in late April that it had "recorded an unrealized loss of $92 million in public investment in the second half of 2021."
Although the largest depreciation from the crash came in the first quarter, investors should still hear the news from Salesforce , one of the most active supporters of the companies before the investment arm's IPO.
Over the past two fiscal years, Salesforce reported combined investment returns of $3.38 billion. Salesforce is due to report first-quarter results later this month, and investors will be watching closely to see if the cloud software provider is out on time or still has a wallet in hand.
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