Booming Covid-era tech stocks see $1.5tn market value loss
According to S&P Global’s market data, 50 of the biggest companies of the pandemic era are showing a collective loss of $1.5tn.
As reported via the Financial Times, companies like Zoom, a powerhouse in the early and mid-pandemic era, recording substantial growth, have now witnessed a fall in company share value.
Many top pandemic-era stocks show market value losses
The fall in market value is dominated by the tailing of remote working to the levels required during the pandemic.
Major companies from that era have watched the worth of their offerings lessen. Economists had forecast this waning of growth, given the rampant growth some of these companies had seen in a short space of time due to national and global demands for their services.
Steven Blitz, chief US economist at TS Lombard, a world-renowned leader in economic forecasting, told the FT “Some companies probably thought that shock was going to be permanent. Now they’re getting a painful bounceback from that.”
Ring Central, the video and cloud-based digital company has seen its value dip 90 percent compared to its domination alongside other remote technology providers.
Zoom, which was ever-present in every remote working household, saw its shares rise to an astronomical 765 percent during COVID-19. The climbdown has been anticipated due to untenable levels of sustained growth, but Zoom stocks have faltered by 80 percent. This is the equivalent of a $77bn decline since the end of 2020, according to Bloomberg data compared by the FT.
Barry McCarthy, the CEO of Peleton, another winner in remote fitness technology during the pandemic, announced he would step down. This comes in light of the company’s dip in market value, leading to the shedding of 400 workers and around $49bn in market cap losses.
Similarly, the electric car manufacturer Tesla has seen a market value decline of over $100 bn since December 2020. Due to internal turmoil and less-than-favorable global sales, Elon Musk’s company’s fate has been a significant talking point over the past year.
Musk’s company slashed the price of its marquee vehicles, announced multiple job cuts, and faced multiple executives’ handing in their resignations.
So the winners of the boom period of the pandemic are facing new challenges as the world has adapted to blended working scenarios and is less reliant on the staples of that challenging era. The market is reflecting these paradigm shifts and in response, these companies are pivoting to avoid further losses.
Image: Ideogram.
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