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This is a consequence of money getting more expensive. When rates are low, investors pile money into non-revenue producing startups in hopes that something wi

• simplotek 4y ago
  > Now rates are up and the smart money is moving elsewhere. That would only explain drops in future investments, but we're seeing profitable companies with astronomical revenues from their cash cows diving into a massive firing spiral. More importantly, growing interest rates is not exactly the definition of a downturn.
  • extheat 4y ago
    Growing interest rates propagate throughout the economy. The goal of higher interest rates (aside from debt & borrowing becoming substantially more expensive) is to bring down demand and slow the economy.
  • disgruntledphd2 4y ago
    Interest rates go up, future revenue becomes less valuable, companies lay people off to add to their margins to preserve their valuations.
    • simplotek 4y ago
      > Interest rates go up, future revenue becomes less valuable (...) I don't think this is true at all. Central banks hike interest rates to limit and reign in inflation. It's the exact opposite of what you claimed.
      • disgruntledphd2 4y ago
        In terms of people deciding to invest in a company, high interest rates definitely make future revenue less valuable in terms of discounted cash flow models.