Source: Executive Digest
The videoconferencing company, Zoom Communications, is nowadays an example of companies that managed to have a unique opportunity for growth in times of crisis, with the markets corresponding and being the stage for astronomical valuations.
Zoom’s market capitalization rose to US$48.8 billion on May 15, despite having recorded revenue of just US$623 million last year, in a clear rise for Zoom compared to its competitors.
On the opposite side of the wheel of luck is the aviation sector, which suffered an unprecedented drop in demand caused by international restrictions that dictated the closure of airports:
The world’s main airlines (Southwest Airlines, Delta, United, International Airlines Group, Lufthansa, American, Air France), by revenue, have fallen by 62% in total value since the end of January. On May 15, the capitalization of this group was worth 46.2 billion dollars, compared to the approximately 121 billion reached at the end of last January.
As countries struggle to contain the spread of Covid-19, many airlines have reduced travel capacity, laid off workers and cut executive salaries to try to survive.
As for what explains the application’s massive rise in traditional business culture, industry analysts say that corporate users were attracted due to its easy-to-use interface and user experience, as well as the ability to support up to 100 participants at a time.
The application also ‘exploded’ among teachers for use in online school (tele-school), which would force CEO Eric Yuan to take extra measures to ensure that schools could use the platform for free.
Zoom’s ‘meeting participants’ have skyrocketed in recent months, rising from 10 million in December 2019 to 300 million in April 2020.
To confirm Zoom’s recent success, analysts and above all investors are waiting for the company’s first quarter results, which will be released in June.