So much went so spectacularly wrong in so many ways for tech companies in 2018 that it was hard to keep track of all the horror shows.
Some stumbles were so epic — like those of Facebook, Twitter, Google, and Tesla — that they deserve their own postmortem. But these headliners overshadowed three companies whose crappy year has left them facing immense uncertainty heading into 2019:
Snap: The amazing thing about Snap is that we think things can’t get any worse, and then they do. The company’s stock managed to hit a new all-time low just last week, when it skidded to $4.99 per share. In Q3, it lost 2 million users from the previous year. Snap revealed it is under possible investigation related to disclosures from its IPO. And perhaps most troubling, it doesn’t really seem to have any plan for digging its way out and building a sustainable future. About the best news the company got this year was an analyst declaring that its stock had fallen so low it wasn’t worth shorting any more.
Yelp: The year didn’t start off so badly for Yelp. The company seemed to be making progress with its plan to focus primarily on North America, after having largely pulled the plug on international operations. And it even received a bit of vindication last summer, when the European Union levied a $5 billion fine against Google, supporting Yelp’s long-time argument that biased search results had made it nearly impossible to compete abroad. But then it missed some earnings targets in Q3, and its stock plunged 21 percent in November, leaving it currently down about 33 percent on the year. This prompted a mini shareholder revolt, with one major shareholder calling for an overhaul of the board. A couple of years ago, widespread rumors suggested Yelp was on the verge of selling, but management turned things around just enough to keep it independent. Can the company restore investor confidence and climb back up again?
IBM: Just as Big Blue seemed to be regaining some traction, it missed its third-quarter earnings. The company has been generating some much-needed buzz, thanks to its investments in AI, blockchain, and quantum computing. But the earnings miss — plus soaring debt loads — spooked investors, who were suddenly reminded that IBM had posted five straight years of revenue declines before 2018, and it raised questions about the leadership of CEO Virginia Rometty. The company is in the process of divesting about $1.8 billion worth of its software assets, which it can use to reinvest in new products. Of course, it made a blockbuster deal to acquire Red Hat for $34 billion. Still, with its stock down 32 percent on the year, it’s not clear that IBM can stop the slide, even with its innovation agenda.