Early pandemic winners, including Cathie Wood's ARK fund, Peloton, Zoom, Poshmark, DocuSign, Chegg, and Zillow, have seen their market value decline in 2021
Those former tech sweethearts that experienced a reversal in fortune this year could remain in the dumps in 2022
Context & Ripple Effects
The unwind began before 2021: when positive COVID-19 vaccine news landed in November 2020, Zoom shares fell more than 13% alongside Amazon and Netflix as traders bet the stay-at-home economy would fade. This article marks the second year of that trade — Cathie Wood's ARK fund, Peloton, Zoom, Poshmark, DocuSign, Chegg, and Zillow all gave back market value through 2021, with the Journal warning the group could stay depressed into 2022.
The pattern extends beyond this cohort. An analysis of the top 50 stock gainers of 2020 found the tech-heavy list collectively shed $1.5 trillion in value by 2024, and the class that went public at peak enthusiasm in 2021 fared worse still.
First-order effects
- Investors concentrated in these names — most visibly ARK's funds, whose flagship portfolio leaned on Zoom, Teladoc-style stay-at-home bets, and high-multiple growth stocks — absorb the drawdown directly, pressuring fund flows and forcing portfolio resets.
- The named companies lose the valuation currency that funded expansion during the pandemic; Peloton, which had already stumbled out of its 2019 IPO before its boom-and-bust arc, illustrates how quickly the premium evaporates once usage normalizes.
Second-order effects
- Capital reprices across the whole growth complex: over half of the 53 tech companies that went public in 2021 — Coinbase, Robinhood, Rivian, UiPath, Marqeta, Toast — end up down 50%+ from their IPOs, showing the discount spreading from listed pandemic beneficiaries to newly public peers priced off the same multiples.
- Late-stage private funding chases the same deflating benchmarks: digital health startups raised a record $29.1B in 2021, and three years later roughly two-thirds of public digital health companies had lost value even as the Nasdaq rose 32%.
Third-order effects
- If the pattern holds, markets systematically misprice shock-driven demand surges as permanent growth — the $1.5 trillion erased from 2020's biggest gainers suggests the correction is structural to how momentum cohorts are valued, not company-specific.
- The durable lesson for allocators is that category leaders from one demand regime (home fitness, e-learning, telehealth-adjacent software) do not automatically retain pricing power in the next one, pushing investors toward businesses whose revenue survives the normalization of behavior.
The trend: Demand pulled forward by the pandemic was capitalized as permanent growth, and the multi-year repricing of those cohorts — from Zoom to the 2021 IPO class to digital health — is the defining capital-cycle correction of the post-COVID market.