The concept was pretty simple: As COVID-19 spread across the planet, lockdowns and a general desire by many to avoid infection led to huge changes to how people lived and worked. The impact was wide-reaching.

First, the stock market did its best impression of a falling rock, crashing lower and lower as fears about economic decline spread. Even the ever-ebullient venture capital class took a brief pause from normal levels of investing exuberance.

But then folks realized that, yes, some businesses were going to suffer thanks to the new economic landscape that COVID brought, but not all. So they bid up the value of those assets above their perhaps fair value, as many other investments were risky. This made the value of some firms escalate into orbit.

Software, in particular, was a winner, with the valuations of tech companies rising sharply in the back half of 2020 through much of 2021. Then, as last year reached its final weeks, that began to change.

The worth of publicly trade software companies fell sharply enough that, on the year, all gains for cloud firms were wiped out. The selloff continued into 2022, with further declines now cutting into software valuation gains from even 2020.

The pandemic trade for software is over, and valuations are coming back to Earth. The same thing is happening to other companies, including those who made a mint in the home exercise markets, like Peloton. The value of Peloton, which went public in 2019, shot higher and many people were very stoked.

But the shine has come off the silver:

Image Credits: YCharts

Shares of Peloton are off around 20% today alone.

The pandemic trade was fun while it lasted. It lasts no more.