How has COVID-19 impacted the portfolios of some of the world’s largest Tech Corporations?
During this period of lockdown, companies and millions of people have been forced to stay at home and engage more online. They have found creative ways to remain social through virtual quiz nights, birthday parties and happy hours. Zoom communications, an American remote conferencing service company, has been a major beneficiary of this increase in online congregating. Zoom’s shares have doubled in value in 2020, jumping 120% through March, adding billions of dollars to its market capitalisation, whilst its market value has grown exponentially, reaching $42 billion by March 31st.
Amazon, as well as seen an enormous increase in demand. This American, multinational company, known for its e-commerce platform also specialises in cloud computing, digital streaming and artificial intelligence. March actually saw Amazon’s stock increase as investors saw COVID-19 fuel online shopping and use of Amazon’s streaming services. Amazon’s net sales rose to $46bn for the first quarter, up from $35.8bn for the same period last year.
However, like many industries across the global economy, the tech industry has also seen disruption to its demand and supply chains. This have been expressed through falling stock prices of multinationals across the globe. For example, since January 2020, Booking Holidays Inc. the online travel fare aggregator, more commonly known as Booking.com, has seen its share price fall from $2,053 to $1,411 per share. This is a value drop of 30%, which is roughly equivalent to $30bn of their total market value. Similarly, online travel organisation, Expedia, was also one of the worst hit by the restriction on movement and travel. Their total market value has more than halved since the start of the travel bans, a drop equal to roughly $9bn. Online travel agencies are only a few of the adversely hit multinationals by COVID-19.
It is interesting to explore what the contributions from tech giants and their Billionaire leaders have been in combatting this global pandemic and whether they are doing enough with the wealth at their disposal. Below are some of the ways in which they are helping in this crisis:
· Jack Dorsey, CEO of Twitter, has pledged $1bn to COVID-19 relief programs. This donation is equivalent to approximately 28% of his net worth.
· Bill Gates, Co-founder of Microsoft, has pledged $100 million to fighting the pandemic. This donation is equivalent to approximately 0.1% of his fortune.
· Jeff Bezos, CEO of Amazon, has pledged $100 million to ‘Feeding America’, a non-profit organisation that supports food banks. This donation is equivalent to approximately 0.08% of his fortune.
This poses the question of whether these companies are doing enough in combatting this global pandemic and if it is their responsibility to do more.