The pandemic era minted a generation of investor favorites overnight. Virtual fitness platforms, telehealth disruptors, and metaverse pioneers all promised to reshape the world and markets rewarded that promise generously. But when interest rates climbed and the hype faded, the reckoning was brutal. Some of these companies have lost nearly everything they once gained. We take a hard look at what went wrong, whether any of them still have a path back, and what every investor should take away from one of the most dramatic valuation collapses in recent memory.

When the story overcomes reality

The year 2021 has been a dream come true for a certain category of stocks. Pandemic created a seemingly ideal environment for companies offering virtual fitness, telehealth, game engine or augmented reality technologies. Low interest rates reduced the discount rate on future earnings to a minimum, allowing extreme valuations for companies whose profits were years away. Investors were paying…