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As of March 23, Apple had lost $ 435 billion in market value in about five weeks, and many of its retail outlets were closed as the virus pandemic devastated the global economy and stock markets. Meanwhile, a report released by the National Bureau of Economic Research found that 2% of small businesses surveyed had closed permanently in March.
On December 30, Apple’s AAPL,
The market value totaled $ 2.29 trillion, up 133% since March 23. Meanwhile, Congress has approved nearly $ 300 billion in additional relief for small businesses, money that many hard-hit homeowners only hope they can help them survive until the pandemic finally subsides.
The success of Apple and other big tech companies and the struggles of smaller companies are just one example of how the pandemic has created winners and losers in business in 2020. Wall Street s’ is reinstated after March; Main Street is still struggling.
In 2020, it wasn’t uncommon to work remotely in sweatpants – meeting on video conferencing platforms like Zoom ZM,
– then get on an expensive high-tech exercise bike and have your favorite restaurant dish delivered to your home (by a driver trying to earn money and hoping not to catch the coronavirus).
Of course, the flip side of this scenario has been deserted office buildings, empty restaurants, and sparsely populated gyms. And with few people traveling, the airline industry needed billions of dollars in government aid and is still threatening to lay off workers.
The following is an overview of which companies have benefited from the pandemic and which have failed.
First, the winners:
Great technology: Big Tech was by far the big winner from the pandemic. The foreclosure orders accelerated the big change in online life that was already underway. With work and home shopping suddenly becoming the norm, profits have proven to be resilient for big tech even as the pandemic crushed theaters, malls and other industries. Apple, Microsoft MSFT,
Amazon AMZN,
Facebook FB,
and the parent company of Google Alphabet GOOG,
GOOGL,
Now they alone represent about 22% of the S&P 500. Never before have five companies been so dominant on Wall Street. At the start of the year, these five countries represented less than 17% of the index. By the end of 2020, however, the pressure is mounting. Regulators across the country and around the world are subjecting Big Techs to more scrutiny, which could undermine their leadership. (Take a closer look at the year in tech here.)
Streaming services: As cinemas closed and lockdowns rolled across the country, people turned to the ever-growing number of video streaming services for entertainment. Americans increased their streaming time by 75% in the second quarter from a year ago, according to Nielsen, as the pandemic accelerated the trend for people to watch TV online rather than through traditional cable. New services launched included NBCUniversal’s CMCSA,
Peacock and WarnerMedia’s T,
HBO Max. Netflix NFLX,
was a big winner, adding 28 million subscribers in the first nine months of the year. And Disney + gained 86.8 million subscribers in just one year, a bright spot for Walt Disney Co. DIS,
whose other businesses, including movie studios and theme parks, have been devastated by the pandemic.
Delivery services: As people squatted in their homes because of the coronavirus, restaurant delivery businesses that were just convenient in 2019 have become essential businesses in 2020. Grubhub’s GRUB,
revenue jumped 36% through September, as more restaurants began using app-based delivery services to survive full or partial closures of their dining rooms. At Uber UBER,
the Uber Eats delivery service made more money in the third quarter than the signature rideshare business. And the trend is global. DoorDash, for example, now offers delivery from 390,000 merchants in the United States, Canada and Australia. The actions of the company DASH,
jumped 86% when it debuted on December 9.
Home training: Fitness diets have moved significantly from the gym to the home in 2020. Interactive fitness bike manufacturer Peloton PTON,
has been one of the biggest winners in the home training trend. Revenue in the first nine months of the year more than doubled to $ 1.9 billion as its high-tech bikes and treadmills found more homes. Subscriptions increased significantly over the year, reaching just over 1.3 million in September, up from 563,000 a year earlier. Meanwhile, gyms weren’t doing as well as people avoided crowded places. Planet Fitness PLNT,
saw revenue drop 45% until September as memberships dwindled and the company laid off workers. Others, like 24 Hour Fitness, have filed for bankruptcy protection.
Pet Supplies: More Americans confined to the house have had pets during the pandemic, and investors have taken note. According to the American Pet Products Association’s National Pet Owners Survey 2019-2020, sixty-seven percent of American households now own a pet. That’s around 56% 30 years ago. Wishing to take advantage of the trend, San Diego-based Petco WOOF,
this month, filed for an IPO. Details remain under wraps, but last year’s IPO by online pet supply seller Chewy provides a drool-worthy comparison. Chewy’s stock CHWY,
has quadrupled since its IPO in 2019. The stock of another pet supply company, Freshpet FRPT,
has more than doubled this year.
And then there are the industries that lost ground in 2020:
Trip: Travel for work and leisure evaporated in 2020. Planes were empty and airports were ghost towns. On April 14, the Transportation Security Administration screened just 87,534 passengers at US airports, down 96% from the same day in 2019. Southwest Airlines LUV,
CEO Gary Kelly said last month that business travel, a major source of airline revenue, fell 90%. A lot less people also needed hotel rooms. Market data firm STR said that at the end of October, the occupancy rate of hotels in the United States for the year-to-date was on average 45%, compared to 66% for the all of 2019, and forget to get away on a cruise: most major cruise lines have voluntarily suspended US Port cruises until the end of February 2021.
Small business: The coronavirus and the drastic measures put in place by government officials to try to control its spread have had a huge impact on many small businesses in the U.S. Restaurants, hair salons, event planners and d Other businesses that depend on proximity to people were particularly difficult. -hit, just like those related to tourism. In April, payroll provider ADP reported that nearly 20 million jobs had been lost at U.S. companies, more than half of which were in companies employing fewer than 500 people. A government relief program helped by providing more than 5.2 million loans to small businesses and nonprofits between April and August. Congress has approved another round of funding, but many companies could still fall back.
Business attire: Detach it? More like don’t even wear it. Many of the millions of people forced to work from home by the coronavirus pandemic have been less inclined to wear work clothes. According to retail industry analyst NPD Group, sales of men’s suits fell 62% from March to October compared to the same period in 2019. People are choosing comfort over style, a trend already in motion but accelerated by COVID-19. Consumers “use active clothing for everyday purposes, which doesn’t always include exercise,” said Maria Rugolo, analyst at NPD. This is good news for manufacturers of sweatpants, T-shirts and even pajamas.
Immovable: Commercial real estate has been among the sectors hardest hit by the pandemic, and there are doubts about how quickly it will recover. Vacancy rates for businesses, offices and other types of property are up sharply from last year. Apartments are going against the trend, benefiting from increased demand for housing. Real estate stocks are one of the few sectors to be down for the year. The pandemic has forced millions of people to work from home and to turn to e-commerce more than ever to purchase groceries and other products. These trends, which were already gaining momentum before the pandemic, have accelerated. The question is to what extent they will affect demand once the pandemic is over.
Fossil fuels: The oil industry was hit after travel was halted in an attempt to contain the coronavirus, causing demand for jet fuel and gasoline to plummet. Producers were already struggling before the pandemic hit, due to a weak global economy and a market flooded with cheap oil. As the coronavirus spread and Saudi Arabia and Russia mounted a price war, oil prices plunged. Prices have recovered but have languished around $ 40 a barrel for months, well below what most producers need to break even. The oil, gas and chemical industries laid off 107,000 workers in the spring and summer, according to a Deloitte Insights study. Oil giants Exxon Mobil XOM,
Chevron CVX,
and others have cut expenses and downsized.
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