The stock markets have become extremely volatile in the wake of the global health crisis. Travel company stocks are crashing as varying levels of advisories urge people to stay home, from recommendations of social distancing to complete lockdowns of countries. On the other hand, many stocks of companies with services that enable customers to stay home are doing well during uncertain times.
As countries across the world implement travel restrictions, some of the companies that have been the hardest hit by the pandemic are airlines, cruise lines, hotels, live events, and booking companies. In addition to travel restrictions, many governments have also banned large gatherings of people, which has negatively affected sporting and live entertainment events. This sector of the economy has lost $322 billion in value over the last month, while the global airline industry alone lost $157 billion in total value across 116 airline stocks*. Some notable casualties of the crisis include: Royal Caribbean Cruises plummeted 68%, Marriott Vacations Worldwide fell 59%, United Airlines dropped 57%, Expedia Group slid 53% while Live Nation Entertainment is down 44%*.
With governments around the world encouraging their citizens to stay home, it is no surprise that streaming service stocks are on the rise. If we look at China as an example, their popular streaming service iQUIYI had a large spike in viewership as COVID-19 cases rose in the region, leaving many confined to their homes**. Netflix currently has over 61 million US subscribers equalling to 46% of their market, which shows the main area for growth is likely going to be international viewers**. According to Yahoo! Finance, Netflix is up 10% “which suggests more people staying at home equates to more revenue.” Spotify, although less talked about, is a music streaming service that is also on the rise. Spotify has one major benefit over Netflix, they are already a global company, having its main market divided with 35% in Europe, 27% in North America, and 22% in Latin America**.
Delivery companies around the world are on the rise, as the pandemic causes more people to stay home. Amazon, the largest online retailer in the world, is close to hitting an all-time high when it comes to stock value, according to Investor’s Business Daily. Ready-to-make meal kit providers are also seeing an increase: Blue Apron rose 120%, while HelloFresh climbed 20%***. And of course, even in a global health crisis, fast food delivery services are skyrocketing, as can be seen by Waitr’s jump by 750%***.
It’s hard to say what the future holds for the stock market as the pandemic escalates, but one thing is for sure – companies that cater to couch potatoes are likely to stand up better through the ongoing COVID-19 restrictions.
*Neufeld, D., 2020. The Hardest Hit Companies Of The COVID-19 Downturn: The ‘BEACH’ Stocks. [online] Visual Capitalist. Available at: <https://www.visualcapitalist.com/covid-19-downturn-beach-stocks/> [Accessed 26 March 2020].
**Quast, J., 2020. These 3 ‘Stay Home’ Stocks Could Be The Biggest Winners Of The Stock Market Crash | The Motley Fool. [online] The Motley Fool. Available at: <https://www.fool.com/investing/2020/03/23/these-stay-home-stocks-could-be-the-biggest-winner.aspx> [Accessed 26 March 2020].
***Lango, L., 2020. 3 Food Delivery Stocks Exploding Higher Amid Coronavirus Panic. [online] InvestorPlace. Available at: <https://investorplace.com/2020/03/3-food-delivery-stocks-exploding-higher-amid-coronavirus-panic/> [Accessed 26 March 2020].
Finance.yahoo.com. 2020. Netflix Vs. Roku: Which Streaming Stock Is The Better Buy? 5-Star Analyst Answers. [online] Available at: <https://finance.yahoo.com/news/netflix-vs-roku-streaming-stock-225506180.html> [Accessed 26 March 2020].
Galgani, M., 2020. Stocks To Watch: FANG Stocks Netflix, Amazon Trying To Swim Upstream. [online] Available at: <https://www.investors.com/research/breakout-stocks-technical-analysis/netflix-stock-amazon-stock-resist-coronavirus-stock-market-crash/> [Accessed 26 March 2020].