Conversely, a languishing stock price could be life threatening, especially to a company with a vociferous burn rate. The cycle that got everyone there is easy enough to outline. Investor optimism, based on projections of unlimited possibilities, bid stock prices sky high. Incremental growth is just not good enough, certainly not enough to justify these kinds of valuations. Everybody, everybody, has to be the biggest thing since Microsoft and apple pie.
Expansion comes quickly.
Profits, everyone reasons, will come later. But only a little later. The level of debt and the phenomenal profits needed to make sense of these valuations start to prompt the more savvy of investors to re-think and redo their math. In other words, they prefer cash to their own stock. I think the general thrust of the report seems sound.