Tall tales of a turnaround

[Bloomberg] [Fully Charged]( From [Bloomberg](   [FOLLOW US [Facebook Share]]( [Twitter Share]( [SUBSCRIBE [Subscribe]](  Hey y’all, it’s Austin. Have you heard the news? Snap is back. After hitting a historic low in December, the social-media company has seen its share price more than double. Suddenly, [investors]( and [analysts]( have re-boarded the Evan Spiegel rocket ship and suggest it’s finally [primed]( for long-promised hyper growth. A [Jefferies analyst even wrote](, after visiting Snap Inc.’s headquarters last month in Santa Monica, California, that it “felt like it had grown up from a startup to a more mature company.” Wait, isn’t this the same company that has suffered from a string of [top]( [executive]( [departures](—including the finance chief hired from Amazon.com Inc., who left [after just 8 months](—while also still trading roughly [30 percent below its initial public offering price](? For a company whose market rallies have been as ephemeral as the content shared on its platform, that sure was a lot of optimism regained overnight. As a [blessing]( of technology unicorns have gone public in recent years, frenzied investors have watched their hopes of booming share prices dashed. In many cases, the reality-distortion field of Silicon Valley gave way to the reality-defeating landscape of Wall Street—both perhaps equally as irrational. Yet, on the public markets, these ailing tech companies seem to get more leeway than their traditional corporate counterparts. Every slight uptick in their stock—even if shares remain well below IPO pricing years after their debut—is seen as a surefire sign of a turnaround and its founder-CEO’s latent genius. With a bundle of public listings on the horizon following Lyft Inc., from Uber Technologies Inc. to Pinterest Inc., Peloton Interactive Inc. and Postmates Inc., it’s worth examining this frustratingly common narrative trajectory, the post-IPO equivalent of the so-called [startup hype cycle](. Once-hot meal-kit startup Blue Apron Holdings Inc. has [plummeted]( a whopping 90 percent below its IPO price. Popular hardware makers, such as GoPro Inc. and Fitbit Inc., are down roughly 70 percent. And formerly sizzling consumer internet companies, including Groupon Inc. and LendingClub Corp., are down around 80 percent. No matter the decline, even [tiny gains]( in revenue or an [incremental new]( product [can apparently]( serve as [indications of a certain comeback](. Analysts and prominent investors often give tech companies the benefit of the doubt for minor signs of life, even if the stocks are underperforming by all objective measures. This trend is even more pronounced if you factor in the exuberance of first-day pops. Dropbox Inc., for example, [soared]( nearly 40 percent when it started trading around this time last year. Its shares are now 22 percent below that price, and yet, analysts are [cooing]( and labeling it a “[magic box](.” The same could be [said]( of [Cloudera Inc.](, [Pandora Media Inc.]( and [Twitter Inc.]( (Any doubters, again, just don’t understand the “[magic](.”) In the private markets, startups are crucified for such drops or stalls in valuation. Foursquare Labs Inc., for example, got [ripped apart]( when it took a [down round]( several years ago. (The company, which has continued raising funds privately, has [still not gone public](.) Venture capitalists like to refer to such startup lulls as troughs of sorrow or valleys of despair, their transitional downfall apparently as predictable as [clockwork](. This standard somehow gets scrambled in the public markets. It’s unclear what ought to count as a true turnaround, but it seems fair that a comeback should only be ascribed to a tech company that has at least surpassed the market’s initial expectations. —[Austin Carr](mailto:acarr54@bloomberg.net)  And here’s what you need to know in global technology news Tesla's board probed an alleged incident involving CEO Elon Musk, who was [accused of pushing an outgoing employee]( in a heated confrontation.  After Google's AI ethics board imploded, questions remain about [who will check]( the technology giant's societal influence.  Facebook was found to have been hosting dozens of cybercriminal groups on its platform, including [hackers and spamming professionals](.  Tencent and Hyundai are working together to develop self-driving technology for autonomous vehicles, South Korea's Maeil Business Newspaper [reports](.  Join Bloomberg's flagship tech event, Sooner Than You Think 2019, on June 11 to 12 in London. Learn and be inspired by the world's most influential tech leaders. View the website [here](, and apply to attend.    You received this message because you are subscribed to the Bloomberg Technology newsletter Fully Charged. You can tell your friends to [sign up here](.  [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022