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Wayfair, your WeWork/Uber/Slack/et al. wake-up call is here.

After yet another quarter of dramatically increasing losses and despite an equally dramatic increase in revenue, Wayfair is in danger of being caught in a dangerous vortex in the investment community. The online home furnishings seller, which has posted big gains in its sales, customer counts and average tickets for years, has yet to make a dime, losing money for 21 straight quarters. And while that was acceptable for a very long time on a Wall Street obsessed with the endgame, it may no longer be enough.

Wayfair’s stock has lost nearly half its value over the past year and its earnings – or lack thereof – announced a few days ago sent its shares down more than 18 percent, though it has recovered some of that since. It came as the company missed analysts’ forecasts on its losses and those losses continued to stockpile. The company blamed the tariff situation for many of its problems, but some people weren’t buying it. Famed TV financial guru Jim Cramer called Wayfair’s stock “toxic” and said its payoff-down-the-road story was “unraveling.” KeyBank Capital Markets analysts were just as unimpressed. “A slowdown in growth was attributed to the impact of tariffs,” they said, “but we are increasingly concerned that growth may be entering a more mature phase.”

All of this negativity comes as Wall Street has been burned more than usual by once-glamorous online and tech companies that have crashed and burned after going public…or trying to go public. Online startup superstars like Uber and Slack have lost significant portions of their value after entering the market. WeWork didn’t even make it that far and has dialed back its aspirations significantly, losing its CEO and founder in the process. Major investor Softbank took the blame while taking a $4.7 billion bath on its WeWork investment.

Wayfair Losing Its Way

This environment does not bode well for Wayfair. It is already facing increased competition from Amazon which is stepping up its push into home furnishings. At the same time, Wayfair has seen its customer acquisition costs increase as part of an overall rise in its SG&A. It has been woefully behind in logistics and is frantically playing catch-up, building out its distribution center facilities to bring its fulfillment processes up to speed. It is also opening its first physical stores, and if this turns out to be a larger initiative, there will be additional expenses associated with a wider roll-out.

Wayfair has always said it was intentionally building out its business and that at some point – never specified – it would turn the corner and become profitable. It pointed to the perennial online poster boy, Amazon, as proof of concept. Of course, it’s well known that Amazon’s real profit center has been its web services hosting business not its core retail segment. And even there, it is transitioning to a model where it is just a sales agent for third parties, collecting a commission for its services. As much as half its general merchandise sales are now made through its Marketplace platform.

Wayfair has no such third-party component, even as other competitors like Walmart are moving to bulk up their efforts in this area. The paucity of physical stores, the lack of a third-party selling platform, the fulfillment system weakness and the high customer acquisition costs: put them all together and it’s not a pretty picture for Wayfair.

The End of the Endgame Game?

Some people have always speculated that Wayfair’s endgame was not to be an independent, profitable company but to be an acquisition for somebody else that wanted a turnkey e-commerce business. But at more than $7 billion in annual sales, it is too big for a company like Bed Bath & Beyond – which desperately needs e-commerce help – to buy it.

Likewise, other potential suiters like Walmart, Target, Home Depot or even Amazon itself are sufficiently far enough along in e-commerce that they don’t necessarily need whatever Wayfair would bring to them. In Walmart’s case, it has specifically said it is done buying into e-commerce companies as its stumbles in those prior efforts may serve as a further warning for any other retailers looking at a similar strategy.

All of which leaves Wayfair in a tenuous position. It is not making any predictions as to when it will become profitable nor is there anything coming along in its publicly stated business plan that would be a game-changer for the company. Wayfair’s tells you on its website it has “7 million satisfied customers and counting!” Unfortunately, for now at least, the number of satisfied investors is significantly less.