Private equity poured trillions into software companies between 2018 and 2022. Every single one of those deals is now underwater “and probably by a lot,” according to Steve Eisman, the fund manager who called the subprime crash before anyone wanted to hear it.
The SaaS Model Is Breaking
The software-as-a-subscription model that powered a multi-decade bull market depended on two assumptions: growing seat counts and annual price increases. AI threatens both. Software multiples have been cut in half, and for the first time in decades, price-to-earnings ratios for software stocks sit below the broader market multiple.
Adobe (NASDAQ:ADBE) and ServiceNow (NASDAQ:NOW) fell 31% and 32%, respectively, during Q1. The infotech sector dropped 9% overall, dragging the S&P 500 to a 4% quarterly loss.
A $200 Billion Debt Wall
The pain extends well beyond public …
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