With The Beginning Of 2022 And The Dimming Of The Ominous Shadow Of The Corona Virus, Companies Gradually Entered The Post-Corona World To Step On The Path Of Success As Before.
So that the value of shares of companies active in the field of information technology increased in an unprecedented way; interestingly, a large amount of liquidity from users around the world flowed into the digital currency market.
It seemed that investors could invest in projects like NFT or IPO more easily than before and could get the highest possible profit, but suddenly the conditions changed, and those sweet dreams gave way to bitter realities.
A series of events and wrong decisions caused the biggest names in the technology field, a few steps above the competitors until two years ago, to suffer huge losses. Of course, not all significant tech failures in 2022 were due to economic factors.
Some of the most prominent players in the cryptocurrency field fell due to management and technical mistakes, of which the Luna cryptocurrency was one. Now that 2022 is over and we’re entering 2023, it’s a good idea to take a quick look at the tech industry’s biggest crashes and failures of the past year.
FTX
One of the biggest tech news stories of the past few months was the sudden collapse of cryptocurrency exchange FTX, which led to the arrest of its former CEO, Sam Benkman Fried. A few months ago, Sam Benkman-Fried was the lauded face of the crypto-currency market, with extensive handouts to competitors and hefty employee bonuses.
Still, a shocking report from CoinDesk in November revealed that Benkman-Fried’s trading firm, Alameda Research, kept most of its assets in FTT, FTX’s proprietary token. Alameda was rumored to be essentially backed by FTX’s multi-billion dollar reserve. As a result, a strange fear fell among investors, and they quickly withdrew their capital from FTX.
This issue caused SBF to declare bankruptcy in a short period and owe one million to its investors. Currently, the process of dealing with the bankruptcy of this exchange continues, but it does not seem that retail investors will be able to get their tokens back. In addition, there are rumors that various lawsuits have been filed against him and the FTX platform.
Google Stadia
Just three years after the launch of Google Stadia, the company announced on September 22 that it is shutting down the cloud gaming service. The reason for this was apparent. Despite all the brilliant advantages this streaming technology offered, it was not well received, one of the reasons being that the service was unstable. According to Google, this service could never be liked by users as expected. Interestingly, one of the developers said that he had finalized a contract to release one of his games on this platform just one day before announcing the suspension of the service above.
The stadium was closed forever on January 18, 2023. Google announced that all gamers who purchased Stadia hardware would be refunded. Despite the shutdown of the service, Google has stated that much of the technology used in Stadia, especially the augmented reality developments, will be used in other projects. Also, the workforce active in the stadiums is supposed to be employed in different departments and projects of this company. It is painful and unfortunate news for a fledgling gaming platform to close its doors forever just a few years after its birth.
Terra/Luna
In early 2022, just as the value of cryptocurrency markets began to decline, the collapse of the Terra ecosystem and its associated token, Luna, dealt another major shock to the cryptocurrency industry. The fall was sudden, as the Lunar reached an all-time high in April, and precisely one month later, its value was almost zero.
Terra was supposed to be a stable currency because it was worth one dollar, but instead of using fiat money, it relied on an algorithmic pairing with Luna. After initial signs of capital outflows appeared in May, Terra and Luna founder Dequan reassured investors that there was nothing to worry about and used stored Bitcoin backers to prevent his digital currency from falling in value. Still, it did not pay off, and Rumors that Daquan’s identity was fake and that he was involved in another failed algorithmic stablecoin caused Luna’s value to drop by 96% in one day.
Dequan and other people in the company did nothing to save Terra’s ecosystem. However, the company’s CEO launched a new blockchain called Terra 2.0 a few weeks later. South Korean authorities have issued an arrest warrant for Kwon amid an investigation into the collapse of the original blockchain, but he is currently on the run. Authorities believe he is hiding in Serbia and is continuing to work with law enforcement to find him.
Meta
This project aims to develop a virtual ecosystem where users can work, meet and play various activities and games. Mark Zuckerberg is still committed to developing Metaverse, even changing the company’s name to Meta to show that he is entirely focused on it. However, investors and the general public look at this project typically and do not want to invest heavily. amSince Zuckerberg announced his vision, the stock price of Zuckerberg’s company has plummeted by 65%.
According to published reports, Meta’s flagship platform Horizon Worlds, is having trouble keeping users happy and has decided to limit targeting to a select number of users. Reports indicate that the number of monthly users of Horizon Words in October 2022 was about 200 thousand people, which is a small part of the largest Metaverse platform. For example, the children’s platform Roblox has more than 200 million monthly users.
Meta has denied rumors that the company’s founder and CEO will step down in 2023 due to mounting pressure from investors, but Zuckerberg seems well aware of the criticism leveled at his plan. After laying off about 13 percent of his workforce in early December, he has come under fire. One former employee even said the idea of Metaverse alone was enough to sink Meta.
Amazon Alexa
Thanks to the company’s Echo series of products, Amazon’s voice assistant, Alexa, has opened its way to millions of homes. Still, a report published by Business Insider shows that Alexa has not been able to achieve the success expected by Amazon. The Alexa project has caused Amazon to lose around $10 billion by the end of 2022 and has never been profitable.
These losses are caused by Alexa’s inability to convert users into potential customers for Amazon’s core business. The device’s primary purpose was to increase the sales process of other devices through the voice assistant system. For this reason, Echo devices were provided to users at reasonable prices to encourage them to use different Amazon products.
Alexa was said to be Jeff Bezos’ favorite project, but since his fortune dwindled, so did his enthusiasm. The problem is that many Alexa users only use it to listen to music or ask it to do simple things like predict the weather. Amazon receives a tiny percentage of money for streaming music through its service. Simple commands such as announcing the weather forecast do not earn Amazon revenue.
In November, it was announced that many of the developers working on the Alexa project were out of a job, and rumors suggest that a large part of the project’s developers will be out of a job shortly.
3AC and Voyager
In July 2022, the cryptocurrency investment company Three Arrows Capital suffered irreparable losses due to some wrong investments. AC3 received a massive loan from the Voyager platform, which caused them to file for bankruptcy a week after AC3.
They announced in a press conference that the platform’s $1.3 billion crypto asset is currently worth only $650 million due to its association with AC3. According to the proposed restructuring plan, customers deposited into the said fund will receive digital currency, AC3 recovery proceeds, common stock in the new company, and Voyager tokens as compensation.
The bankrupt brokerage’s assets were auctioned in September, with FTX being the highest bidder. However, with the bankruptcy of FTX in November, Voyager’s assets have been put up for sale again, and currently, Binance is the highest bidder. Following these auctions, the status of Voyager platform users is not clear for months, and they cannot cash out their deposits.
NFT
Beginning in 2022, users suddenly embraced NFTs, and these non-fungible tokens gave users record-low profits as investors raced to find the next big batch. This issue caused the value of famous NFTs such as Crypto Punks and Bored Ape Yacht Club to increase to a record high. However, in the second half of 2022, Bloomberg reported that transaction volume fell by 97%, from $17 billion in January to $466 million in September.
The NFT space and cryptocurrencies, in general, have always been volatile. More recent data showed a continued decline, and it was estimated that the total value of transactions across all five major platforms was only $394 million. Values for high-end collections have also fallen sharply, with BAYC’s floor price now hovering around $84,000, down from around $420,000 in May.
Still, the price drop of the most popular sets and the overall reduction in trading volume have even the most optimistic investors worried. The main factor behind the NFT boom at the beginning of 2022 was novice buyers who have now lost significant capital, and it does not seem that they will be able to make substantial profits in this market even with the NFT boom again.
Apple self-driving car
Apple is one of the few giants in the world of technology that prevents stagnation in its ecosystem by posting solid performance and high profits, even when competitors see their profit margins decrease. Of course, in 2022, the situation for Cupertinos turned out differently. As reported by Bloomberg, Apple’s long-awaited self-driving car may not be self-driving at all.
According to some people close to Apple, these cars only have self-driving capabilities on highways, and someone always needs to take control of the vehicle. In other words, Apple’s car still can’t compete with rivals like Tesla and GM. In addition to postponing the plans for the self-driving car, Apple has also delayed the release date to another time. “This product will be ready for 2026 at best,” says Bloomberg.
Celsius
Another crypto platform that promised high ROI but had no plans to deliver on its claims was Celsius, which filed for bankruptcy in July. Celsius acted like a bank, promising investors a return of up to 18.63%. While the number of users was constantly increasing and the company was paying loans to customers, the system maintained its stability.
In September, Celsius founder Alex Machinsky stepped down as CEO. When the interest payment to investors reached a high figure, it became clear that Celsius could not pay interest to users and only was based on the “Ponzi scheme.” Celsius’ bankruptcy proceedings are still ongoing, but it does not appear that retail investors can recover their funds.
Peloton
The rise of the sports company Pluto seemed unstoppable early in the coronavirus pandemic as consumers looked for ways to exercise at home. Sales reached the highest level, and the company’s stock value rose. After a disappointing decline in sales in 2021, Pluto’s stock plunged 76%, and 2022 shows no signs of stopping.
According to MSN, the company’s biggest problem is investors’ lack of confidence in Pluto’s new CEO, Brian McCarthy. His decision to start selling bikes on Amazon and Sporting Goods didn’t have much of an impact on sales, and in the third quarter of 2022, the company’s profits fell another 23 percent. Considering the loss of 400 million dollars and the decrease in sales, it is unclear how this company wants to become profitable.
Even McCarthy had told investors that New Year’s holiday sales would bring things back to normal, but that didn’t happen. Pluton was once considered one of the pioneers of the technological revolution in sports and fitness equipment. Still, if the downward trend continues, it will soon join history.