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The future for Zoom and airlines will be unknown as the economy can change in any direction. Today Zoom market cap is close to the market cap of 7 biggest airlines taken together.
American communications technology company Zoom Video Communications Inc (NASDAQ: ZM) managed to capitalize on the coronavirus outbreak. As the whole world transferred to working from home, virtual meetings became more than a thing. So, today, Zoom has a market cap that is very close to the world’s seven largest airlines altogether.
At the time of writing, Zoom (ZM) stock was down by 4.74% to $166.55.
Back in December 2019, the company had 10 million daily users who were participating in video calls through this platform. By April 2020 this figure had rocketed to 300 million people in the workforce, including even the British cabinet.
As per the International Labour Organisation (ILO), 81% of the global workforce of more than three billion people have had their careers impacted in one way or another by the coronavirus outbreak. And while for some this, unfortunately, meant immediate layoffs, for many workers, mostly in economically developed countries, that meant that their work will be done remotely, online as they work from home and offices stay closed.
Not Just a Quick Fix
Zoom has, therefore, proved to be preferred not only as a quick fix to engage working from home, but also to learn from home as well. More than 90,000 schools in 20 countries are supposedly using Zoom for teaching and learning classes.
Numerous people have stood taken aback that Zoom, which was only launched in 2013, has succeeded to jump over more famous names in the video communication sector, such as Skype or Google, which from a few days ago, also has its Hangouts video calling function.
Anxious to compensate for the missed possibility, investors have converged to the company. Zoom stock has risen 157% in the year to date, while the net worth of its Chinese-American founder Eric Yuan has jumped to just under $8 billion (£6.4 billion, €7.28 billion).
The tremulous impact of the COVID-19 effect on the global economy and workforce has been monitored by the visual capitalist, a website that displayed the fact that Zoom Video Communications’ market capitalization is now more than the combined worth of the seven largest airlines in the world.
Zoom and Airlines
At the current moment, the Zoom market cap is $46.95 billion. Meanwhile, the situation with airlines is not very optimistic.
Southwest Airlines (NYSE: LUV) stock is at $27.07 (+13%), with a market cap of $15.95 billion. Delta Air Lines Inc (NYSE: DAL) is trading for $21.75 (+13%), its market cap is $13.86 billion. United Airlines Inc (NASDAQ: UAL) is at $23.84 (+20%), the market cap is $6.941 billion. Deutsche Lufthansa AG (ETR: LHA) is trading for 8.14 EUR (+8%). The capitalization is 3.81 billion EUR.
The shares of International Consolidated Airlines Grop SA are trading for 188.15 GBX (+11%), the market cap has hit 3.74 billion. The stock of American Airlines Group Inc (NASDAQ: AAL) is at $9.79 (+8%), the company is worth $4.14 billion. Meanwhile, Air France KLM SA (EPA: AF) is also 5% up, at 4.14 EUR. The market cap is $1.73 billion.
All together their combined market cap is around $55 billion.
Great Chances for Further Rise
With countries around the globe shutting down their borders and governments reducing domestic, let alone international travel, the air travel sector went through significant changes – and not on a good side. Since the end of January, the combined revenues of leading air companies have plunged by 62%. By the middle of May, their combined market capitalization stood just a little bit more than $46.2 billion.
The durability of this discrepancy is dubious, for sure. The same goes for Zoom’s chances for further rise. The company went through a number of security failures, partially as a result of its rapid rise. Last month, it was discovered that hackers were spreading publicly the accounts and information of 500,000 users for free on the dark web.
While some have been saying that the easing of the lockdowns across the globe will bring Zoom back to its pre-corona numbers, others have been claiming this rise is a sign that the work culture needs an urgent change. Even Twitter CEO Jack Dorsey has recently said that his employees could work from home “forever”, even after the dangers from infection goes off.
There is almost the same dismay as to the long-term allure of airline stocks. Even though revenues will most possibly pick up as travel rebounds again, there are some worries that this crisis might have a long term effect on the growth of many major airline companies. Such concerned investor sentiment was blazed even further during the last few weeks when billionaire Warren Buffett revealed he had sold all of his airline stakes.