Is lockdown’s tech bubble about to burst?

Netflix is not signing up subscribers at the rate it once did. Disney+ has stalled. At Boohoo, growth is not as red hot as it was just a few months ago, while Deliveroo’s float on the London stock market was quickly dubbed ‘flopperoo’ by City wags. Zoom’s shares price has stopped, er, zooming, at least in the upward direction.

A random collection of snippets of business news? Well, to some degree. But there is also a common theme to all these stories, and one that is significant for investors. We are about to witness a serious bout of what might be termed the post-pandemic blues. The companies that did brilliantly while the world locked down are going to see a significant slowdown as it opens up again. And since those are the same businesses that have driven the equity indices to all-time highs, the entire market will suffer as well. True, those tech stars will still dominate the 21st century but there will be a sharp downturn first.

We are familiar with how a handful of web-based companies advanced rapidly while we were locked down for much of the past year. No one had really heard of Zoom until we all suddenly had to work from home, but its user numbers exploded and its share price rose eight-fold as the Covid-19 pandemic spread — taking its market value to well above $100 billion. Netflix signed up new viewers in record numbers as we all whiled away the evenings watching Emily in Paris and Bridgerton: another 37 million joined in 2020, its best year on record. Other streaming services smashed all expectations.

Meanwhile, every kind of online shopping site boomed, with the proportion of retail sales on the internet in the UK climbing to 36 per cent in January, an advance of more than ten percentage points in under a year.