COVID-19 quickly put the stock market in the ICU, with signs of unprecedented volatility and declines. However, the market’s resilience and swift action by the Fed made this downward spiral short-lived. The Russell 2000 Index, a benchmark for small-cap stocks, is one of several indices that highlights this.
Within a one-month period from late February into March, The Russell 2000 Index was down more than 40%, signaling the end of a long bull market and entrance into bear territory. Yet, two months later, at the end of May, the Index is up over 35% from its low. In the private market, the impact of volatility on healthy, pre-COVID-19 software company valuations is much easier to track. As SaaS founders consider their financing options, the picture might be a bit less glum than they might imagine.